Check the Local Setting | Temp directory. Found the message will sometimes display when there is a few thousand files there (did a migration and forgot to clean up afterwards).

Running pmail 4.41 under winxp, all sp's and hotfixes installed.  Get "insufficent disk space to complete this operation" message although have 160 GB disk w/ 60 GB empy.  pmail (programs and folders) occupies 4.92 GB.  What's up?  What's the fix?

There can be a number of causes but most of the times when I have seen this message it is because Pegasus has lost contact with the server often because the server has been turned off when Pegasus is running on Workstations and the message appears when the use tries to close pegasus or do any mail filing operation.   This can also happen if the network connection to the mail server is lost.