If I'm not mistaken, E:\Mtw_atvi\sound.cpp is the source code file generating the error (here's where having the source code for an unsupported game would be nice ). I'm guessing the sound HEAVY_TROOPS_MARCH_SLOW is probably one of the three Medieval-Total War\Sounds\Battle\Troops\inf_walk_(lrg/med/sml).wav files. You could try playing the sound files independently, just to see if you have a corruption, but I doubt it since you have had this problem with multiple installs.

1 Gig RAM should be plenty to run MTW. Have you looked at the Task Manager (both before and after starting MTW) to see what your memory usage is?