You should set it to allow Windows to automatically manage virtual memory. You should also remove non essential programs from your startup list using msconfig. Also scan your system for malware.
Per:
http://askbobrankin.com/low_virtual_memory.html
When all of your computer's real physical memory (RAM) is in use, Windows will try to create virtual memory by grabbing a chunk of hard drive space and treating it like real memory. Your software can't tell the difference between real and virtual memory, but you might because virtual memory access is much slower, due to the hard drive activity it requires.
If you encounter the low virtual memory error message, then you have used the maximum amount of real plus virtual memory that is supported on your system. Sometimes programs that crash or ones that are poorly designed will not return their working memory space to the operating system when they're done using it. Other programs that need a large amount of memory to run may fail because Windows cannot "see" the available memory. In most cases, a shutdown and restart will resolve this problem.
Windows Knows Best
If you still see the dreaded "Your system is low on virtual memory" message then the first thing to do is make sure your computer is configured to allow Windows to automatically manage the virtual memory. In Windows XP, follow these steps:
Click Start, then open the Control Panel.
Click Performance and Maintenance, and then click System.
Click the Advanced tab.
Under Performance, click Settings.
Click the Advanced tab.
Under Virtual memory, click Change.
Under Drive [Volume Label], click the drive that contains the paging file (virtual memory) settings that you want to change. In almost every case, this will be your C: drive.
Click to select the "System managed size" option, then click Set.
Click OK three times and restart your computer.
When you allow Windows to manage your virtual memory, it should make the optimum amount of virtual memory available, by automatically shrinking or enlarging the paging file as needed. If that doesn't solve the low virtual memory problem, there are a few more things you can try.
Eliminate Non-Essential Programs
Over time, we tend to accumulate a bit of clutter on a computer. My article "Making Windows XP Run Faster!" will show you how to keep your system updated, eliminate viruses & spyware, scrub the hard disk of unneeded files, slim down your startup selections, and eliminate unnecessary system services. All of these things will free up resources in your computer, making it run faster and more reliably.
Add RAM to Your System
It might just be the case that your computer needs more real, physical memory. By this I mean RAM sticks that can be purchased in most computer, electronics, or office supply stores. If your PC is more than three years old, chances are it's close to being obsolete -- at least in terms of the ability to run today's resource-hogging software packages. And adding RAM to an older computer is the most effective thing you can do to upgrade it.
To see how much memory you have installed, follow these steps under Windows XP:
Click Start, then open the Control Panel.
Click Performance and Maintenance, and then click System.
On the System Properties window, you'll see the type and speed of your processor (CPU) and the amount of RAM. Note that Windows always seems to report that you have slightly less memory than you actually have. For example, if Windows reports 496 MB of RAM, you actually have 512 MB. (Memory will always be installed in 64 MB increments.)
The more RAM you have, the better your computer will perform. I recommend you have a minimum 256 megabytes (MB) of RAM, but with 512 MB or even a gigabyte of RAM, you'll notice much better performance.