I have started using Android Studio 1.0.1 and there is nothing I can do as I have this error and even the XML can\'t be rendered.
Error:Unable to start the daemon proces
Error occurred during initialization of VM Could not reserve enough space for object heap Error: Could not create the Java Virtual Machine. Error: A fatal exception has occurred. Program will exit.
Same thing happened with me.It is just because your 32 bit OS doesn't have enough space. Here is the solution,
1.Open File->Settings->Build tools->Compiler
2.there in compiler you just update VM-options to -Xmx512m -XX:MaxPermSize=512m
Note:You need to type the same, including the space in between.
OR
1.Just update the line in gradle.properties # org.gradle.jvmargs=-Xmx512m -XX:MaxPermSize=512m