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Not sure exactly how it's done in Vista, never played with it but try increasing your Virtual Memory. Ctl Panel > Systems > Advanced, Performance Settings and the Advanced tab. Needs to be at least twice the size of your RAM. even more. This gives the system some virtual ram using a temp file location on the Hard drive.
Also turn off all the fancy display options on the first screen after you click on the settings button. Set it for basic. This will turn off all the fancy screen effects and backdrops etc freeing up more memory and the CPU. Hopefully this will get it going, no guarantees. 2 gig would be minimal for Photoshop apps I would say.
Photoshop is a resource hungry beast, I know from trying to get it running on PCs at work that were not really designed to do it. Vista may have other issues.
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