Unable to create titles, getting "Out of memory" error message

I am editing a project on FCE 2.0.3.
I recently re-opened the project after about a year. It is stored on a 500GB external firewire hard-drive. I am working on a Mac G5 Powermac 7.2 with OS 10.4.11 with 1GB of RAM. I have my system settings on FCE set at 100% for memory usage and still cache. All my system settings on FCE are set to save to the external drive. I have 16GB available on my G5 memory.
Every time I try to create a title using Title crawl, i get this error message:
AE Effects Error: Out of memory using "title crawl."
Also, every time I close the project and re-open it, I have to reconnect all the media and re-render everything, even though I save the project each time. I have also Saved As a different project name multiple times and this doesn't help.
One other issue: The titles that I have on the project already look clear when the video is paused on a frame, but when they are moving they look very low-res and pixilated. The pixilated look also happens when I output my video to a QT movie. How can I make the titles look sharp?
Please help!
THANKS
-Pierre
Message was edited by: Pierre Degaillande1

Before you do anything, trash your preferences exactly as detailed in this link:
http://fcpbook.com/Misc1.html
+"AE Effects Error: Out of memory using "title crawl.""+
Try pushing down the memory usage and still cache a lot, and see if that helps. You only have 1GB of RAM, so keeping them at 100% is not a good idea. A computer can easily use about half a gigabyte just maintaining regular processes. To make sure you don't overload your RAM, you need to set the amount of memory FCE can use to a much smaller amount.
+"Also, every time I close the project and re-open it, I have to reconnect all the media and re-render everything, even though I save the project each time. I have also Saved As a different project name multiple times and this doesn't help."+
Are you moving files around on your scratch disk or renaming them? If so, you will have to reconnect them every time you change things.
+"The titles that I have on the project already look clear when the video is paused on a frame, but when they are moving they look very low-res and pixilated. The pixilated look also happens when I output my video to a QT movie. How can I make the titles look sharp?"+
Are you looking at the fully rendered movie? Click Option-R to render everything out.

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