The first thing I would try would be opening xterm, becoming root and running apt-get update and apt-get upgrade and then apt-get dist-upgrade.

If that doesn't work, you need to cut drastically down on the number of programs using rootfs, or just programs in general (you can run a backup first, of course).

Basically, that message is telling you it doesn't have enough memory to do things the easy way.

One easy way to get extra memory is disable catalogs in App Mgr.