Uh, guys?
You need to learn the difference between video memory and system memory.
For example, My graphics card is an Nvidia card with 512 MB of memory. That needs to hold not only the textures, but also two copies of the display, and video data for my second monitor.
If I'm running 1600x1200 at a bit depth of 24 bytes, multiply that by two and that's how much video memory I'm using just for the display. Anything left over is for textures in my graphics card.
Let's put this another way.
When figuring out what size to make the textures, imagine the absolute largest it will be in the game and make it that size. Double it the model you are textureing has a backside.
Here's an example...
Magic at *AT MOST* takes up a quarter of my screen. So if you make a texture that is greater than 512x512 you are wasting my video memory because there is likelihood I'll never see the detail and you make the system really start to drag when it load textures. It doesn't matter if it's cached, when you make that initial load, the system is going to stall.
Characters need 102x1024 (And that's pushing it!) because they also never take up more that 1/4 of the screen, but they also have a backside
So what you need to so is figure out the original texture and scale it appropriately. I will say that the new requirement for the game should be 1600x1200 *MAX*. The original game was 32x240 so that means you have to scale your textures by a factor of 5.
Don't pull numbers out of your rear-end or else you are going to break the game, use the original texture sizes and scale. Squaresoft already did the texture math already for us.