I installed Parallels 7 on my iMac some weeks ago, and subsequently "Windows XP". The programs I installed after that in XP have all worked fine, but now I am trying to install a flight simulator called "Phoenix", which is less than 2.5 GB in size. When I try to install the program, I get an error message "There is not enough free memory to run this program. Quit one or more programs & then try again". However, I can't find anything wrong! There is approximately 94 Gb of free space available on the XP hard-drive, and 1.5MB of RAM allocated. A friend of mine, is running the same program with only 58 GB of free space, and 768 Mb of RAM. Can anybody offer any advise on this problem. Thanks.
Try to increase video memory in VIrtual Machine > Configure > Hardware > Video. Or play with 3D acceleration.