Out of Memory message

I get the above message intermittently on my PC which causes a lockup (requires reset). Ran HDD diag = no errors, ran scandisk=found 1 lost cluster(4 out of 5 times), ran System File Checker= found 2 files had changed- updated. Still get error. Am I missing the obvious? Do I need to Reload. PC is Win98 with 128Mb RAM, 20Gb HDD(17Gb free) PIII 800 so space is not the issue