I imagine it's a memory problem. 1.5GB is only enough for simple scenes. If you can swap to a better video card that would be a good idea. You can try reducing the size of your textures as well, that should help. Going from 4096x4096x to 2048x2048 for instance will mean 1/4th the memory use. Try using as few lights as…
Definitely a hardware issue. Intel GPUs are really not what you want to work with when doing anything related to 3D. Probably even more for real time. And your RAM is definitely not enough if you plan on working with 16bits images. But it's not necessary as explained by Earthquake except if you really want like crazy to…