Lately when I try to use my contact directory by clicking on TO: to find an email address it tells me I am "Out of memory or system resources. Close some windows or programs & try again."
Open up Task manager "Right click on task bar, and open it up". Select the performance tab on the task manager, the bottom graph is your memory usage. Try and re-create the problem and see if that memory is being used up.
How much RAM is installed? How many programs are running in the background?
While running Outlook and getting this error, try running the Task Manager at this point (CTL+ALT+DEL) then click on the Performance tab. How much memory is 'Available'?