At a guess, I'd have to assume your "out of memory" errors indicate that you don't have enough memory. *Shrug*
The fact that EQ1 runs just fine is completely irrelevant. EQ2 is *much* more demanding of system resources and memory than EQ1, and especially so in the newer zones.
I have the game installed on two computers. Neither is anywhere near high-end, but both would run the game reasonably well. Until recently. Unfortunately, one of the memory slots on one of the motherboards fried, reducing the RAM on that machine from 1 gig to 512 meg. I can still play on that machine, but only with graphics turned down to minimum. And even then, I don't dare take either of my characters home to Neriak, because the machine *will* crash with an "out of memory" error almost as soon as I enter the zone.
You didn't provide any specifics regarding the system you're running the game on, but if you're getting "out of memory" errors, you obviously don't have enough RAM installed.
-- Darryl (Milquetowst)