Well it's not a virtual memory problem keeping you from saving a project
file that's for certain.
Unfortunately though if you are having problems doing anything at all in
Movie Maker it is likely that you have a bad installation.
Do you have WMM2.0 or WMM2.1?
If you have Version 2.0 then the problem is easily solved by downloading and
reinstalling WMM.
If you have version 2.1 then it gets a little more difficult however since
WMM2.1 is not a stand alone program. Here's a few options for you:
1) If you have a CD with SP2 on it then you can reinstall it without
uninstalling it first.
2) If you do not have a disk you can get one free from Microsoft:
http://www.microsoft.com/windowsxp/downloads/updates/sp2/cdorder/en_us/default.mspx
3) You can uninstall SP2 "Start -> Control Panel -> Add/Remove Programs" and
then use windows Update to download and reinstall it. Once done here I still
recommend ordering the free disk from Microsoft as above in option #2.
4) If it used to work but now doesn't you can simply try doing a system
restore back to a point where the program worked using Windows System
Restore.