Oracle Database Discussions

Hello, I'm using Oracle 11r1 on a Windows Server Standard SP2 32-bit OS with 4GB of RAM. I've been tasked with load-testing our application running our database through JBoss, and at around 300 threads I begin to encounter this error:
Listener refused the connection with the following error:
ORA-12518, TNS:listener could not hand off client connection

My listener.ora file looks like this:
LISTENER =
(DESCRIPTION_LIST =
(DESCRIPTION =
(ADDRESS = (PROTOCOL = TCP)(HOST = db1)(PORT = 1521))
(DIRECT_HANDOFF_TTC_LISTENER=OFF)
)
)
#DIRECT_HANDOFF_TTC_LISTENER=OFF added after reading suggestions from other threads

And tnsnames.ora looks like this:
REMOTE =
(DESCRIPTION =
(ADDRESS = (PROTOCOL = TCP)(HOST = db1)(PORT = 1521))
(CONNECT_DATA =
(SERVER = DEDICATED)
(SERVICE_NAME = REMOTE.emb)
)
)

I modified this line in init.ora, guessing that the processes might have been getting starved:
processes = 1000

I also tried this in case the processes/sessions parameters for the database were insufficient:
SQL>alter system set processes=1000 scope=spfile;

I tried using this 3GB switch to increase the memory alloted for Oracle, though it had no apparent effect:
C:\>BCDEdit.exe /set IncreaseUserVa 3072

Can anyone suggest a solution to this problem? Several sources indicate that it could simply be a lack of available memory, so if anyone can confirm this, I may be willing to accept defeat. I've browsed other answers to this problem but they were either unresolved or unrelated.

Note: I'm very new to Oracle, but willing to learn. If the solution is apparent, I apologize. If more information is needed, please specify the location and process to attain it and which sections are pertinent.

Thanks for your assistance,
-Paul