Not enough memory for Sapphire

Per my Distributor's request, I took my 960 x 720 HD horror film of 89 minutes in FCP and changed the settings to 1280 x 1080 in order to output to digibeta tape and Sr Cam.

Now, after resizing to 151% of the image and "13" under distort aspect ratio to avoid that stretched look, I tried to save it and I'm getting the message, "Sapphire cannot save, Sapphire doesn't have enough memory." After looking at other boards, I see that adding more RAM is possibly the answer, even though I have 8 gigs of RAM currently. Interestingly enough, it did seem to save the project when I reopened it. Now it seems to just sputter along playing every frame if I'm pressing down on the right arrow key.

1.) Will adding more RAM really solve the problem or is it really because I'm on an outdated first gen Intel dual core MacPro tower? It doesn't really play well at all in real time since I changed the settings.

2.) Would more RAM help this? Am I going to need to get a new computer to cut 1080p projects vs the 720 projects I've been working on in the past? It worked fine in 720p.

3.) On another note, I added film damage "grain" and now that I was told to up-res to 1080p, should I remove the grain? Won't the grain get worse if I change the settings? Won't the grain be more evident?

I look forward to your thoughts. Thank you.

10.6.4, Dual Core 2.66, 8 gb ram, first gen intel mac, fcp 7.0.2,

8 Gigs is fine.

If your distributor told you to output 1280x1080 to Digibeta and "SR Cam" tape (HDCam SR maybe?), he must have been smokin' some pretty good stuff. When I personally uprez for HDCam tape layoff, I export Same Settings / Self Contained Quicktime out of FCP, open it in QT Pro and export it to another quicktime at 1920x1080. I bring that back into FCP in it's own sequence and Export To Tape.

When life gives you dilemmas...make dilemmanade.