Hi Toots, virtual memory is an extension of your computer's RAM or actual physical memory. When you run multiple programs simultaneously, the computer looks for RAM segments/blocks that have not been used recently and copy them onto the hard disk (not sure if you have heard the term page files). This frees up space in the RAM to load the new application.
The hard drive (virtual memory) is much slower than actual physical memory. Also when your machine is busy multi-tasking and has used by most of it's physical RAM, the OS has to constantly swap information between the physical and virtual. At some point your virtual memory space (given it's limited) will also be consumed to a large extent and may give errors like the one you had.
The best thing to do is to exit out all the programs and reboot the machine. Sometimes when too many processes are open you get these errors.
Hope that helps.