There can be many reasons for this error.
Off the top of my head, it sounds like you do not have the Windows page file set up properly. The page file is basically virtual RAM (memory). It is a file stored on your hard drive that is accessed when a program needs more memory than you actually have; consider it a kind of fail safe. Since I see that you're using Windows 7, I'll walk you through how to set the correct page file.
On your desktop (or start menu) right-click My Computer (or Computer) and select properties.
On the right side pane, select "Advanced System Settings." The System Properties dialog box will appear.
Select the "Advanced" tab if it is not already.
In the "Performance" box, select "Settings."
The Performance Options dialog box will appear. Select the "Advanced" tab.
In the "Virtual Memory" area, select "Change"
Select the check-box next to "Automatically manage paging file size for all drives."
Select "OK" three times and you should be done.
You may have to restart your computer depending on your setup. If you do have to, go ahead and do it and then your game should work correctly.
If that does not work, try running the game under compatibility mode. If you're not sure how to do that, feel free to message me and I'll help you out.