Adobe Photoshop CS4: Not Enough Memory

I purchased a brand new Toshiba A200 laptop. It has 4GB RAM, Dual Core Processor and running with Windows Vista 32-Bit OS. I downloaded Adobe Photoshop CS4 few months ago which I primarily used in my job as a designer. It was working fine until last night when I was painting an illustration; an error keeps popping up that is so annoying.
The error is: Adobe Photoshop CS4 Extended could not complete your request because there is not enough memory (RAM). I am completely lost so I checked on my available RAM but it has lot of free spaces. And the memory preference of my Adobe Photoshop is set to 60%. I deleted all my plug-ins and everything that may be the possible cause of the error. But I have no luck. What can I do to resolve this? I need help as soon as possible since I am using this on my job. Thank you.
