If you're scanning direct to Photoshop there may be a setting for your Temp space(s) that's gotten mismangled. I don't have Photoshop to look at, but I've had some "difficulties" with the rather bizarre settings I find in Photoshop Elements (ver 2 - a really old one).

WinXP should be able to use a fair fraction of the disk free space, and for most system temp spaces (there are several) shouldn't care a lot about whether it's all contiguous. Individual programs/processes can have their own unique Temp spaces, so using a lot for one process can eat up what's available for another one.

Older Win OS versions required each temp space to be in contiguous free space, so if the free space was badly fragmented the piece of it that could be assigned to a particular "Temp" folder could get really small, even with a lot of "total free space."

A thorough defrag of the hard drive might help.

Even if your WinXP can use fragmented Temp folders, if the scan program was built for an earlier OS it may restrict its own temp space ticket to the largest contiguous empty spot on the drive. It may or may not be able to relocate the temp folder by itself so you might need to force it to "re-establish" the space. If it uses an "address-assigned fixed" Temp space, any little bit of junk that gets written into the assigned Temp space for that program may make it look like there isn't any room left.

The suggestion would be (1) run Disk Cleanup to get rid of trash, (2) Defrag and (3) look for a way in the scan program to reassign the temp space/folder. If you don't find a setting in the scan program, (4) reassign Photoshop temp space(s) since some scanner programs may use the space reserved by the first "photo" program they find on the machine.

(Photoshop Elements, in my version, allows you to set a "secondary Temp" reservation that can be on another drive, but the usual setting is "session only" and that assignment has to be reset the next time you open the program. I haven't needed to look for a way to make a permanent such setting that will stick between sessions.)

I use an Epson Twain scanner program in Photoshop Elements that I got as an "update download" for my Epson flatbed scanner. I get the same "error" occasionally but only when I try to scan an 8"x14" (US legal size) page at 1200 dpi or more. (That would be a 17 megapixel (280 MB) single scan?) Scanning a bunch of individual pics stalls at about 115+ 0.5 - 1.5 MB objects. No error¹, but when a scan "poops" I just save what I've got and start over.

¹ When a scan stalls, trying to clear the scan-in-process in PSE closes the program and loses what you've got scanned but haven't saved. Turning the scanner off and back on closes the last scan so you can save the rest of what's up.

John