Hi Sam,
there are two scenarios:
1. You use a 32 bit Windows:
then Windows limits photoscan (like all other 32-Bit Applications) to use 1,5-2GB or (2,5-3GB with "/3gb" Bootini-switch) of ram. Thats a general 32-Bit OS-Issue and not Photoscan specific. Theoretically its 4GB but thats without things like codecs, graphicsmemory mappings and so on.
In this case only resizing the images or disabling/removing some photos (that are maybe not needed) would help (or trying a lower setting in the meshing part)
2. You use a 64 Bit Windows:
In this case you are limited by your 4 gigabytes of RAM. So
you could resize the images or disable some photos OR additionally go and buy more RAM
Btw. 64 Bit OSes can be limited too (thats more a MS-thing):
Win 7 64bit Home Basic: max 8 GB
Win 7 64bit Home Premium: max 16 GB
Win 7 64bit Pro -> Ultimate: max 192 GB
I only wanted to comment that in the case you go and buy more ram
You could try another meshing method too. (i guess "exact" is the most memory consuming method), but i am sure that someone from AgiSoft could comment about that better.
Best regards
Jan