Startup disk has no more space available for application memory? I purchased a new Macbook Pro (8,3) last April, and have been using it heavily for xcode development, and little else.

This morning a message popped up:

"Your Mac OS X startup disk has no more space available for application memory"

It then suggests closing applications and removing files from my startup disk.

I presume this means virtual memory, however my disk has 600.26 GB available, according to Finder. I do have a time machine backup disk attached to the computer as well, but it has 664 GB available.

What does this message mean when there is certainly plenty of disk space remaining on the primary hard drive?

I have 8GB of RAM, a 750GB hard drive, and am running OS X 10.6.8. If any of the other system info is pertinent, let me know.
I've seen that message in programs like Photoshop that have their own virtual memory systems rather than just assuming the OS can handle RAM and memory allocation.

A reboot should clear things up. (safe mode boot might be nice if you want to run a full disk repair pass and then reboot normally)