This is really a question for the win9x forum, but the responses given have been accurate. Should you find a large number of programs running in the background when you go ctrl-alt-delete, go to start-run type msconfig, click ok, click on the startup tab and get rid of programs you don't think you need. Keep systray, load power profile, antivirus, etc. and get rid of other stuff (common culprits include reminder programs, ms office startup, sound, video, modem, keyboard and mouse controller programs that don't really serve any peruprose, etc.)
If this does not resolve the problem, you still have some options. You can buy more ram, which is dirt cheap right now (the message is referring to RAM, not any other kind of memory or storage.)
Also check your computer's virtual memory settings by right clicking on my computer and going to properties, then the performance tab, and virtual memory. Make sure the "let windows manage my virtual memory settings" is selected. FYI, virtual memory is what your computer does if it runs out of RAM...it uses space on your hard drive (many thousands of times slower than RAM) as RAM until the faster, more efficient RAM gets freed up.
You can always monitor how low your resources are by right clicking on my computer and going to properties, performance. The percentage it gives you should be an indicator if you have too many programs open. A properly tuned win98 computer should be at least in the low 90's at startup (the highest I've seen was 98%...anybody ever gotten higher?) and should rarely or never get into the 50's.
HTH,
-SN
