Out of Virtual Memory Error on startup

Hi

I upgraded my laptop to XP pro from XP home and when starting up, between xp loading up and the login screen appearing, I get the msg 'Out of Virtual memory' and then reboots. The error msg also says something about the page file but it disappears before I can read it.

Tried to boot in safe mode but reboots at the same place.

40gb hdd with two partitions, 8gb free on one and 19gb free on the other.
laptop has 512mb ram.

I hooked up the laptop hdd via a usb external hdd box to my desktop and am able to see all the data, I did a clean up, removed all temp and back up files, did a defrag.

Run adaware/spybot - all ok

I did a search for pagefile.sys but it was not found on the laptop drive.

I tried to reset the page file size in performance options/virtual memory and selecting the drive for the laptop so see if this worked but nope.

Any ideas on what I can try next?

Thanks

 

Had a problem like this with a 2k upgrade.. actually fdisk /mbr fixed it.. can't find the exact article to cite it.. but that was it.
Giver a whack.