I have had a similar error. >.< I have more room than the download needs but it got to 99% downloaded (after 6 hours) and says there's nto enough room. Then, it exits the dowload and nothing was accomplished. I've double checked, but It's an error. It appears that I won't even be able to reach the install page.
Please remember that the revised system requirements point to needing more than 2GB of RAM to run smoothly. Plus a lot of people forget to turn off memory-eating programs. I myself use a virus scanner that detects games and reduces it's footprint accordingly, plus the Windows Vista/7 Superfetch feature really doesn't help gamers so you could try turning it off and see if the memory problems were caused by Superfetch not cleaning the cache correctly. Worst.. Windows... Feature.. Ever.
Are all you guys running XP? with Fat32 hard drive partitions?
My first suggestion would be to format your hard drives and rebuild them with NTFS partition sizes. This also leads to my second point which is, most people never bother re-installing windows. Having a 2 year old copy of windows won't help you run STO any better.