photoshop keeps on crashing

Hello All, I'm new to the forums and to photoshop so please bear with me on this question.
I have PS7 and it works fine when I'm working with small images less than 1000pixels(most of the time), but with my recent purchase of a 5MP Sony F717 digital camera I am now working with larger photos 2560x1920 pixels (I print these photos up to 13x19). Everytime I run an action or go further than i'd say 5 layers to an image I get the blue screen of death and my computer restarts.
I am running a compaq presario laptop 1.2 GHz with 256 Ram. I have set my memory cache to 80 % which I thought was enough. Is there a way around this or would you guys advise that more memory is needed?

Get more RAM.

yeah i import images of that size and i do it with ease just because of a 2.3ghz and 512ddr and a 128 ti4800

thx guys.. i went to the computer show and got a new desktop hehe
2.4 ghz p4 and 1gig of memory.. all for $400.00/ no cd-rom/monitor/os though.. but i got an extra cd-rw and monitor anyways..
i'm installing windows xp now..