insufficient memory or disk space is an error that will occur if Normal.dot is corrupted or damaged.
When Word starts misbehaving the prudent thing to do is to simply replace Normal.dot.
(Normal.dot is the default template for Word.)
Use the Find/Search Files or Folders feature of Windows Start, Find or Start, Search
All Files and Folders
Type in Normal.dot
Search Drive C:
Select Search or Find
You should see either Normal.dot or Normal in the search results depending on how you configured the Folders.
Delete it and if you see ~ormal.dot or ~normal.dot delete those also to your Recycle Bin.
When you start Word again it will create a new normal.dot that is the default Document1.doc.