Virtual PC needs at least 0.5 GB (512 MB) RAM to be left to host to be able to run a virtual machine, so the available RAM to assign to a virtual machine is total RAM of your host minus 0.5 GB. Your screenshot shows the maximum you can assign to virtual machine is 1,495 MB, meaning you have a total of 2 GB of RAM on your host.
If you assign the full available amount to virtual machine, it leaves that said 0.5 GB to host, which is really little, making running virtual machine a real PITA. A recommend a good compromise, assigning 1 GB to virtual machine, leaving 1 GB to host.
Kari