This error has been showing up recently and it seems to me ( just my 2 cents here ) that it works down to 2 possible issues, the most common is physical memory in your system. The more memory available to Bitcoin, the better as the block chain is getting to the point I almost need a new hard drive just for the block chain. It helps if you have more than 2 Gig of ram, not how much space is left on the hard drive, although that can also cause cannot allocate memory errors on some systems.
Either way, start with this link, if your model is listed, look in to more memory and all that involves. If it isn't, look at what ones listed there are comparable to yours and consider upgrading to one that can have the memory upgraded later.
The other option is to move your block chain information to a different folder and reopen Bitcoin and see how far it goes to download the block chain information. If the second option ' magically ' clears it, it could be due to one of the alternate currencies based on Bitcoin and one of the peers sending erroneous block chain information. If it does run in to an issue with 10 or more weeks left to update, then it is a memory issue. Also, back up your wallet.dat file ( copy to some thing like btcwallet.dat ) on to a removable drive as it contains your ' basic wallet including password lock ' information and a new system could rebuild your current wallet with that one file.