is it hard drive causing " not enough memory..."

everything started after i formated hdd.now whenever I connect to intenet after 10-20 I always must disconnect and reboot because i get a message "not enough memory to perform that operation" or "not enough storage to perform another operation".even worse things are when playing games,after no more than 5min it is guaranteed to freeze and nothing helps,exept pressing "reset".alt+ctrl+del dont work.after such shutdown (i have some kinda norton utilities) when norton utilities scan hdd,it reports "boot area on hard drive contains incorrect data about disks free space,because of that DOS may report disks free space incorectly or slowly".doesnt matter if I say "fix it",problem remains.also when I did a surface scan ,found 2 bad clusters=32mb bad disk space.when I ran dells diagnostics tests,quick tests say "your system is configured optimally".when i ran IDE disk separate test,1 test went trough and after that on second test ,on SEEK test it continued to go forever.the left figure that represents how much is already done from right figure ,so the left figure was flashing and some times i could see that from what was before 397... (almost finished) it becomes again 154... and goes over and over like that.I left it for 30min and it didnt finish it although all other test didnt take more than 5min.And in addition to that 2 more strange things:
is it normall for memory report to look like that:
Fixed Disk Drive Status
Disk Drv Mbytes Free Usage
1 19469 100%
C: 19469
it kinda looks like no free space at all.
and another oddity:
if I go to BIOS event log and if i look at it ,it shows nothing but freezes as well so I have to press "reset"again.
Cant imagine what is going on.Would appreciate any help.