Hmm...maybe a problem with your HD? Can you still read/write to it OK? (i.e. can you still play Halo single player and use savegames OK?) If so, copy everything important (that you can't reinstall), like any Word Documents you need, to another medium (like a stick drive or CD) and try changing HDs.
BUT! ONLY DO THIS AS A LAST RESORT, EVEN IF ALL ELSE FAILS
There are other less drastic methods probably, so wait for Mxy to give input
I can play Halo multiplayer just fine, but when I try to play Campaign an Exception error occurs.
As an experiment I popped in a disk that I havn't used in years (Call of Duty) and it says I couldn't play it because "You might not have enough memory to play Call of Duty", even when it was run in Safe Mode (the game) it would do this.
So I don't think it has anything to do with my Halo Disk, which, I'm assuming is what HD means in this case. If not, please feel free to correct me.
I don't really know what else to tell.
'Sounds to me like you didn't select the "Set" button before you "OK"d out of the window....
Check that the value has changed to 512MB....
And as I said before I am 110% positive that I hit the Set button, and when the login screen came on after the reboot the same message appeared again. So I'm still at a loss as to what to do.