BTW, I have never seen this particular error on any of my computers (well at least not the last sentence.. the part dealing with "not enough storage". I have seen the first part however, dealing with "access permissions" and I know what causes it). So it seems like you have a combination of issues.
Did you try setting the stack size to maximum? 50
Ok. Well after having a crack at the permissions and policies and what not, I stumbled accross this link Not enough server storage | Windows Problem Solver. You will notice about 1/3way down the page it mentions "Acronis true image 2009" can cause this error. Turns out it is a common problem. I just cloned the laptop HDD onto a new larger one so I had this program installed.
Thanks for the help any way. I hope this helps for any one else who has the problem.
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