Hi,
This error message is not related to RAM, but the size of WInPE .wim file. In case of WinPE, the default size is around 107MB and allow grow upto 120MB. This error suggests that your WinPE .wim file is over 120MB. Unless you added a very large number of drivers, it should not grow above 120MB.
If you have over 256MB memory in the client and want to use more drivers, it is best to use WinPE-512 instead of WinPE. Even by default this contains more drivers and allowed to grow upto 350MB without adjusting manifest files.
Could you try removing unnecessary drivers added to WInPE or using WInPE-512? You can set the preOS for the client from client properties. If it is for a group of clients, you can do it by right-clicking the folder too.
Krish