Hrmph. 1GB of RAM should be enough, and the W2k limit on threads is really very high, so there's no good reason you should be running out of space. All those clients may be using a large amount, but I kinda doubt they'd be using up so much space that you wouldn't be able to create a new thread. Does this error occur often? If so, does it happen if you close your other programs? The error could have an effect on download speed with LW, as right now (in the released versions) it uses a different thread for each source it's downloading from, so if it can't create the thread then it can't download from that source (and can't swarm and raise the speeds as high as it should).