I set up a dos 7.01 in virutal pc 2004, many games perform very well, but I got a error playing Legend of Kyrandia 2, I ran main.exe, a message shown that "not enough memory to run...", any suggestions? I tried to set memory to both 32m and 64m, doesn't fix it.

That's something I suppose that happens for everyone. The game just can't be played in Dos (didn't work for me, too) whatever the real reason, so you'll have to play in in Windows. I suppose there should be a Windows version for it on the same CD as well, which should install automatically. If not, you better buy the thick box with 4 CD's that has the Windows version. The game is worth it.

Try DosBox.
I played LOK2 in real Dos 6.22 enviroment. With 4 MB RAM. The memory problem you are reporting sounds likely to be lack of HIMEM.