E2005 has nothing to do with the amount of memory you have.
Originally Posted By: Manual
E2005 - The texture format is invalid or unsupported by your video card.

Anyway I'd recommend using .dds textures instead. This saves a lot of memory. Why do you wait one frame between loading two images? No wonder it takes so long.

Panels of cause use alpha channels as well.

Always learn from history, to be sure you make the same mistakes again...