from
http://www.slackiller.com/tommy14/errors.htm
Memory allocation failure
Description: The program failed to allocate a block of memory. Likely causes are (in order of likeliness) :
* do not compile thru WC/Hammer F9 "running" - this hogs RAM. Instead use a front end or batch file to organize your compiling;
* the partition holding the swapfile is full (clean out your hard drive, empty trash, clear out unused files, purge your temp files folders and internet browsers temp files.);
* swapfile size is smaller than required (let swapfile be dynamicly allocated, do not set it too small yourself.);
* memory fragmentation (defrag your hard drive);
* heap corruption (reboot and try again. If you have old RAM, make sure it is seated well. check for viruses!).
* on at least one occasion this was caused by a corrupt prefab.
* on at least one occasion this was solved by removing a skybox and so making the level smaller.