Mac OS 9 running out of RAM

The picture you posted shows the OS consumption at 45.5MB, which is not a high amount for OS 9; depending on the number of fonts, extensions, etc, that could be installed, it is not unusual for OS 9 to routinely use around 60MB of RAM. The actual amount also depends upon the total amount of RAM available.

This Apple KBase article has info re Type 1 memory errors and OS 9 -

support.apple.com/kb/TA21578

If it is the same program which returns a Type 1 error all the time, consider that it, or its preference file(s), may be damaged. To address a damaged preference file, throw away the existing one and restart. A new prefs file with default setting will automatically be created when the program next tries to access it.

A damaged font can cause such an error, and can cause the error to appear in more than one program.

If it is Finder that is returning the error, consider rebuilding the Desktop file. To do that, restart, hold down the Shift key until you get the "Extensions Off" message. Then release Shift and press both the Command and Option keys, keep them held down until you get the splash screen asking if you want to rebuild the Desktop. OK that, wait for it to complete, then do a normal restart.

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In OS 9, the OS (including Finder) uses dynamic memory, meaning it has the ability to adjust the memory allocation set aside for it to use; it will do that on the fly, such as when printing and it needs more memory.

Internet Explorer in particular has a memory leak. The longer it runs, the more memory of its allocation it will eat. When there is no more left in its allocation, it will crash. The solution for that is to increase the memory allocation for IE. You can do that via the Get Info window for IE, selecting the Memory tab and increasing the "Preferred" amount. In the case of IE, adding 40 or 50 thousand is not out of line; more is better if it can be afforded.

Similarly, if other programs routinely exhibit out-of-memory conditions, try increasing their memory allocations. For word processors, a 50% increase to the original amount is often sufficient; for graphics apps, doubling or tripling may be sufficient.