Sucess! Well, sort of . . . .
I followed your suggestion, found some additional tweaks, still kept getting the memory error message, so . . . . . I started playing around with the virtual memory settings in the CP, and changed them from 1024 m to something like 2480 - and all of a sudden, it started working! However, I can't for the life of me get my joystick to work. The game shows that it recognizes that I have a Saitek X45 hooked up, and I can select it for throttle, views, everything, but it still refuses to work at all. I am able to fly from the keyboard - just like back in the 80's, but don't really want to regress back to that era for controls. It is neat to get the game up and running and marvel at what we used to think were "stunning" graphics!:)
Thanks again for your suggestions!
Now if only HTC modeled an F-86 and a MIG-15 . . . . .