Insufficient Memory error, reports the log. I also see that your video card don't support big textures (well 2048x2048 is fairly big, but the last video cards climb much higher), so this means your video card is starting to get old.
There are several work arounds:
a) update your video driver with a genuine one
if this don't work
b) switch to an Omega Driver, as per thread
http://www.ageod-forum.com/showthread.php?t=3440c) Reduce to the leftmost box the checkbox 'Max Texture Size' as per thread
http://www.ageod-forum.com/showthread.php?p=28282#post28282d) Check also that your virtual memory is high enough (system partition)
Personnally I would not take half measures here, and do (b) and (c) immediatly, but you can do that in steps if you prefer.