DLLs are binary files, they are libraries used/shared by executables.

A DLL file can and usually has dependencies; meaning it needs to use other DLL files in order for it to run. There are DLL files that are common and shared amongst many programs.

A unfortunate mix of installed programs can cause problems; i.e. you may have installed a program after you installed Vegas that overwrote a DLL used by Vegas with a version of that DLL that it needs.

Anyway, if it is still crashing, you can try to troubleshoot/narrow down the problem and perhaps come up with a workaround, or as a last resort reinstall Windows. Sadly, when Windows gets in a bad state ( DLL hell ), there isn't much you can do.

soo, I am basically screwed?


I think if I buy more RAM, my problems will go away.

I was rendering just now, and it closed but this time it said it was low on virtual memory.

If I buy RAM, will my virtual memory go up?

Did you try removing and re-installing the application? If not, try this before you even consider re-installing the Windows.

As for RAM, 512 should be enough, although I personally don't like to use less than 1GB for Windows XP given that this OS is such a bloated pig. There are things you can do to streamline the OS (turning off unnecessary services, etc.).
Vitual memory is actually Windows using space on your hard drive to store what would normally be stored in RAM, but due to running out of available RAM Windows must resort to using virtual memory (a.ka. your 'swap file').

Some programs, including the software I develop here at my job, do not run well ( *read* crash ) when system resource such as your RAM run low.

Again 512MB should be enough. You must have other processes running in the background (or in the foreground for that matter) that are grabbing memory.
1.) Shut down all programs not needed when running Vegas (i.e. media players, instant messager programs, etc.).
2.) If you are not running 'extraneous' programs, bring up 'Task Manager' and goto the 'Processes' tab. Sort (by clicking) on the 'Memory' column in descending order to see what program/service(s) is taking up the most amount of memory.