You are running out of graphic memory when you use higher resolutions. So try launching the game at 1024x768 and take off full screen.
Anyways, to fix this, do the following steps:
Enter your display properties and set your desktop color depth to 32. If it's already like that then leave it.
Play the game at low resolution
Turn off SSAO and EdgeSmooth
and make sure that you only have one display set in the graphic card's control panel.
Problems like these usually happen either because your running something in the background or your graphic card cannot handle it. What graphic card do you use?
Really don't play the game. It is a great game and I've played it for 20 hours and I wasn't even in prison. Just because I got scared and hide in the corner and build a fort of tons.
Go to this site and check if you can even run the game, or go to run if using windows xp or search bar if using windows 7 and type DXDIAG and see if your system requirements are in check with the game. Hope this helps.
Went to the site, and turns out it doesn't meet the requirements. Dang. I think I'll be using that site to make sure the next game I buy is able to work on my computer.