You have 2 kinds of memory in the router – Flash (may be on the CPU board or an external CompactFlash module), and RAM. Normally when you get the requirements for a given release of Cisco’s IOS, you have a Flash minimum and a memory minimum size. You probably have an IOS that can fit on the flash card, but doesn’t have enough memory to run.
You have some options:
1. Get more memory for the router
2. Replace the IOS with a simpler train (either an older one, or one with less features).
Frequently, IP Base (typically the smallest) will take about 1/2 the memory of something like an Enterprise or IPServices; Encryption and voice capabilities may also extend the minimum operating requirements.