Quote: "now the video card I'm not sure about but I think I got 128mb of video mem"
Maybe you haven't. That error message is appearing because you don't have enough memory on your graphics card.
PIII's are now quite old and I assume your video card is also.
If you are using the latest version of DBP, it's expecting to find DX9.0c and your GFX card probably doesn't support it fully. The fact that you are using only 2D graphics doesn't matter as DBP uses 3D for 2D now anyway.
Are you using the Set Display Mode command or setting it in the project panel?
If the latter, try using the Set Display Mode command with a lower rez and colour depth such as:
Set Display Mode 640,480,16
and see if you still get the error. If not, then you are simply asking too much of your current GFX card and need to lower the settings a bit.
TDK_Man