Zoo Tycoon 2 does not work with Windows 7 (and from the research I've done, Vista as well) due to RAM issues. Following the steps below fixed my problem.
Error Message: You need at least 256 MB of system memory to run Zoo Tycoon 2. (xxx MB detected).
Problem Resolution:
1. Open the start menu
2. Click Run...
3. Type 'msconfig' and hit ENTER
4. Look for the Boot tab (this should be the 2nd tab from the left)
5. Click Advanced Options...
6. Tick the box beside Maximum Memory and set the number to a high amount (I set mine to 4096)
7. Reboot and run Zoo Tycoon 2 again
