We currently have a laptop (Pentium 4 2.0GHz), and we're always running out of "Virtual Memory" because the video card is crap (I think that is what is causing that error), and we weren't able to install a video editing suite on it either (just don't think it was up to the task, needs a better video card again).
Virtual memory has nothing to do with your video card, it has to do with your ram and your harddrive. Basically, windows simulates ram on your harddrive so when your actual ram fills up, it loads the memory onto your harddrive which is extremely slow compared to real ram.
Theres a few things you should do. First off, install more ram into your computer, you obviously don't have enough. Since your running al lot of programs off of virtual memory, this should help a ton in speeding up your computer. Second, assuming you have plenty of harddrive space, increase the amount of virtual memory windows can use.
To do that, right click on "my computer" go to properties, click on the "advanced" tab, then inside the "performance" area click on the "settings" button. Click on the "advanced" tab, then in the virtual memory section, click on "change." Its probably set to "system managed size" but if you click on "custom size" you can set it larger then windows is setting it. I would make the maximum at least 1024 and personally I always set the initial size to the same size as the maximum size because I don't want the virtual memory file to get fragmented and therefore even slower then it already is.