Yup, 32 bit. You don't have AWE enabled, so SQL can only use 1.7 GB of memory. You're probably running into fragmented virtual address space (or are out of virtual address space), linked server drivers use that limited space, as do backup buffers. Try restarting SQL and consider replacing that with 64-bit at some point.
Gail Shaw
Microsoft Certified Master: SQL Server, MVP, M.Sc (Comp Sci)
SQL In The Wild: Discussions on DB performance with occasional diversions into recoverability