See MSKB Q312052 . I fixed a laptop remotely by walking him through these same procedures on a W2K Pro -- 600 MHz, 128 MB RAM. You have enough resources --- it's a MS and 2000 issue where this problem keeps popping up.
SYMPTOMS
If you openthe Printers window or attempt to print from any program, you may receive one of the following error messages:
Spoolsv.exe has generated errors and will be closed by Windows.
or
Printer operation cannot continue due to lack of resources.
or
Subsystem unavailable.
CAUSE
This issue can occur if a printer driver that is installed on the computer is damaged.
RESOLUTION
WARNING : Using Registry Editor incorrectly can cause serious problems that may require you to reinstall your operating system. Microsoft cannot guarantee that problems resulting from the incorrect use of Registry Editor can be solved. Use Registry Editor at your own risk.
For information about how to edit the registry, view the "Changing Keys and Values" Help topic in Registry Editor (Regedit.exe) or the "Add and Delete Information in the Registry" and "Edit Registry Data" Help topics in Regedt32.exe. Note that you should back up the registry before you edit it. If you are running Windows NT or Windows 2000, you should also update your Emergency Repair Disk (ERD).
To resolve this issue, remove printers and printer drivers, and then delete the items that are under certain keys in the registry. Follow these steps: