Pinched this from someone else who had the same problem.
virtual Memory is space allocated on your hard drive for those times that your physical memory (RAM) is not enough.
To increase the amount of virtual memory go to Control Panel > System > Advanced > Performance > Settings > Advanced > Virtual Memory "Change" > Custom Size > adjust as needed. 1.5 times your physical RAM is a good minimum and 3 times your physical memory in MB is good for your maxim
Open the folder that was created by the game on the "C" drive. Right click the exe and pick run this game in compatability mode.
"*System needs at least 3MB of free virtual memory to run.
This message comes up if you have a lot of physical and virtual memory even though it says you don't have enough. Reduce the amount of virtual memory on your system and this error goes away. To do this:
-Click on Start, then Select Run.
-Type in sysdm.cpl and click Ok
-This will bring up your system properties window. Click on the Advanced tab at the top.
-Now in the Performance section you will see a Settings button. Click this button.
-This will open up a performance options window. Click the Advanced tab at the top of this window.
-Towards the bottom of this page you will see a virtual memory box. In this box is a Change button. Click this button.
-Set the Initial size, and the Maximum size to 100MB.