I have solved this Error 12 for 32-bit systems.
It is memory problem so it is my mistake 
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Problem: When i saw report from System Explorer i discovered that maximum RAM used in time was about 2.1GB RAM, so more than 2GB.TS3W.exe can use more than 2GB, but 32-bit system is set tu use 2GB for system process and 2GB for applications. I guess that was the problem.
2GB RAM for applications was reach and that cause error code 12 in sims 3.
I added this "/3GB /USERVA=XXXX" to boot.ini file and change the default settigs of RAM usage to XXXXMB for applications and rest for system process .After this i tested SIMS 3 with virtual memory set to: 4989MB-4989MB without problem.I tested the SIMS 3 with virtual memory set to: off so RAM was used more and again withou problem.I both cases maximum RAM used in time was mored than 2GB.
So i guess that Error 12 is solved for 32-bit systems if you have enough RAM.Note:If you use incorrec value for /USERVA=XXXX , it may cause
graphical anomalies in games.I used /USERVA=2800 and in some games i had graphical anomalies.
You have to use value so that RAM which left for the system will be greater than RAM of your Graphic Card. I have GTX 260 896MB and 4GB RAM.When i right click on My Computer, than left click on preferences i can see that i can use only 3,25GB.So i set /USERVA=2200. 3,25GB-2GB=1,25GB-200MB=1,05GB which is more than 896MB on my Graphic Card.I have 200MB more for applications and still have 1GB RAM for system.
This 200MB have eliminated Error 12 on my PC.I do not know why this have to be exactly like this, but it works! I do not havy any graphical anomalies so far.+ For less lags you should Turn off: Virtual memory and set DisablePagingExecutive=1You can set
DisablePagingExecutive in Windows Registry
[HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager\Memory Management] -> double clic on
DisablePagingExecutive and set value to
1.
Restart PC and system will not use paging.
After restart check
[HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager\Memory Management] LargeSystemCache.It should be set to 0. If not set it to 0. And restart.This two things will provide less lags,swaps caused by HDD activity and paging from RAM when playing.I did quick test and it helped alot. 
This is exact guide for windows xp -32 bit.If you have different system, you should check what this pararamets exacly does in your system and where they are located. What i check it is almost the same
And ofcourse you should have enought RAM for this tweak.
Source:
http://technet.microsoft.com/en-us/library/cc959492.aspxhttp://technet.microsoft.com/cs-cz/library/cc784562(WS.10).aspx-----------------------------------------------------------
Some data:I was testing on some of the largest lot in neiborhood.I guess it is the lot where live 2 SIMS and about 7 cats?!
Settings:
Test one:Virtual memory set: 4989MB-4989MB
TS3W.exe about 1.5GB
Max RAM used about 2.1 GB
Test two:Virtual memory set: off
TS3W.exe 1.7
Max RAM used about 2.2 GB
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My HW and mods:Intel Core 2 Duo E8400 3,00 GHz
Nvidia GTX 260 896MB, Driver Version 285.58
4 GB RAM ( I have 32-Bit system so i can use 3,25 GB)
Windows XP SP3 32-bit
Mods:+UnionCove installed via SIMS launcher
Source:http://support.microsoft.com/kb/316739http://blogs.technet.com/b/askperf/archive/2007/02/23/memory-management-101.aspxhttp://blogs.technet.com/b/askperf/archive/2007/03/23/memory-management-demystifying-3gb.aspx
