Looks like you are using MSDE, which has a limit of 2GB per database.
There are a number of options I can think of:
1. Delete some historical data. (Look at the manuals for individual modules for step by step instructions.) First place I would look is to see if you are storing activity tracking information - that can grow very large over time and most companies do not really need it past about a year or 2 back. It can also be exported and stored elsewhere.
2. Upgrade to SQL 2005 Express - that goes up to 4GB per database (I believe there is a minimum SP level that made GP 8.0 compatible with SQL 2000, I think SP 4 or 5).
3. Upgrade to full version of SQL, that will take away the 2GB limit.
4. Look at a product like Company Data Archive from Professional Advantage, it will 'move' your historical data to a new company database which will free up the space needed (the limit is per database).
Hope this helps give you some ideas.
Victoria Yudin
Dynamics GP MVP 2005 - 2008
Flexible Solutions - home of GP Reports