Source: Microsoft Support

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You have developed a Microsoft .NET Framework 2.0 Windows Forms application. The application attempts to create an instance of an MDI child form.

You receive the following exception and call stack.

System.OutOfMemoryException: Error creating window handle.

    at System.Windows.Forms.NativeWindow.CreateHandle(CreateParams cp)
    at System.Windows.Forms.Control.CreateHandle()
    at System.Windows.Forms.Form.CreateHandle()
    at System.Windows.Forms.Control.get_Handle()
    at System.Windows.Forms.Form.SetVisibleCore(Boolean value)
    at System.Windows.Forms.Control.set_Visible(Boolean value)
    at MyApplication.MainForm.DisplayControl()

This can occur when both the following conditions are true.

1. The MDI child form contains a control which parents other controls.
2. The parent control on the MDI child form removes a child control from its Controls collection in the event handler for the Layout or Resize events.

Do not add or remove controls from the Controls collection during the Layout or Resize events.

The System.OutOfMemoryException is not due to an out of memory condition. The problem occurs due to a System.NullReferenceException which occurred when the window's callback function executed, and referenced a null member of an internal type which tracks the native window for the control on the MDI form. The System.NullReferenceException bubbles back up into System.Windows.Forms.dll and is caught. The Windows Forms run-time assumes the window creation failed due to an out of memory condition, and then throws a System.OutOfMemoryException.

When removing controls from the Controls collection of a Parent control that contains other controls, the native windows for the child controls are temporarily reparented to an internal window (called the "Parking" window), while the Parent control is destroyed and recreated. Then the native windows for the child controls are reparented to the new native window associated with the Parent control. If the code removes controls during the Layout/Resize events, then a new native window will be created for the Parent control, but the wndproc associated with the original native window may still be valid. If the wndproc for the original native window is called; it results in the System.NullReferenceException.

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