Photoshop uses the extra space on your hard drive and/or external hard drives, to store information while you are working on a file, the "scratch disk". PS will use RAM memory first, but PS is a real RAM hog and uses it up pretty quickly. The extra memory PS needs is then taken from the "scratch disk(s)".
The more complex the project the more scratch space PS needs. Basically your hard drive is near capacity and PS doesn't have any place to store information while working on the file.
You can either erase information on your hard drive or use additional hard drives to provide more scratch disk space. In the preference file you will find a scratch disk setting dialogue where you can specify which disk(s) you want PS to use scratch disk space from.
If you don't have extra storage capacity you will have to delete files. As mentioned earlier you can quit PS and PS will then dump the scratch space it was using, but eventually you will run into the same problem.
Hope this helps.