Have you adjusted the Heap setting? I found that I would get the same error after 18 users, but I have had Simple Client running 75+ users off of one server after adjusting the Heap.
Back on the old mailing list, Neal McKinney and JB Leep had a thread going with settings. Here is what they adjusted:
\HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\SessionManager\SubSystems - value Windows. For 64 bit systems, I follow Neal's recommendation and set the values to be 20480.