The most common reasons and corresponding fixes for the issue are described below:
As the message suggests the problem occurs because of insufficient memory to display the folder.
This may happen because of:
• Customizations done to the folder view
• Installed Add-ins and applications
• Business Contact Manager for Outlook etc.
In such situation you need to edit the ‘SharedMemMaxSize’.
To do so follow given steps:
1. Close Outlook.
2. Go to Start> Run.
3. Open registry editor regedit, click OK.
4. Go to the below Location and select the following registry subkey:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows Messaging Subsystem
5. Go to Edit> New> DWORD Value. Then, type SharedMemMaxSize.
6. Click Enter
7. Right click to modify the SharedMemMaxSize entry
8. Enter 300000 in the Value data box. Then Click OK.
9. select the subkey:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows Messaging Subsystem\Applications\Outlook
10. Go to Edit > New> DWORD Value. Then, type SharedMemMaxSize
11. Click Enter
12. Enter 300000 in the Value data box. Then Click OK.
13. Finally close all open windows.
The above can also occur if you have lots of cached public folders. In such case try out the steps given at link: http://support.microsoft.com/kb/2494570