There's a text version of the README that is more easily searchable: ftp://download.nvidia.com/XFree86/Li...DME/README.txt
Just setting the vmalloc size to the size of the failed allocation isn't really what you want. If at all possible, I would recommend using a 64-bit version of Ubuntu as it should have plenty of space. Alternatively, I'd suggest following the suggestion in the README:
Incrementally raising this to find the best balance between the size of the
kernel virtual address space made available and the size of the direct system
memory mapping is recommended. You can achieve this by passing 'vmalloc=192M',
'vmalloc=256MB', ..., to the kernel and checking if the above error message
continues to be printed.
Please see the Ubuntu documentation or contact the Ubuntu support forums for help on passing parameters to the kernel.