Memory error when trying to encode w XviD

[netrex]

When I click save I get this message:

Cannot start video compression:

Not Enough Memory
(error code -3)

I use VirtualDub. I have tried several versions of VD, and I get the same error on all. Don't know why this happens, but it suddenly became like this, because it worked yesterday..

HW:
P4 2.6GHz
ASUS P4P800 Deluxe
1024MB PC3200
Windows XP SP1 (fully updated)