You logs says -
"Error occurred during initialization of VM
Could not reserve enough space for object heap
Could not create the Java virtual machine."
which clearly means you don't have enough RAM (physical memory) available to initialize new JVM process. Check what's the capacity available - you can use prstat command for checking runtime memory utilization and use /etc/prtconf|grep -i mem (in solaris) to check for actual physical memory available.
Note: It could happen that current runtime memory utilization shows free memory, but still if other process running on the machine has pre-reserved heap space and memory not available, you will not be able to start new VM.
That would not be the case - it is a fresh windows VMware install with 8GB of RAM, and in documentation SOA requires 3GB. Currently only 1GB of physical memory is used on the system.
Your log show the following information
C:\Oracle\MIDDLE~1\JDK160~1\bin\java -client -Xms1280m -Xmx1280m -XX:PermSize=
2048m -XX:MaxPermSize=4096m -Dweblogic.Name=AdminServer -Djava.security.policy=C
:\Oracle\MIDDLE~1\WLSERV~1.3\server\lib\weblogic.policy -Xverify:none -da -Dpl
Have you tried to change this parameters in JVM server start to:
-Xmx:1024m and -Xms:1024m or
-Xmx:1g and -Xms:1g
Some more debugging required here. You have added PermGen size as 2GB starting and max 4Gb - is it required to have such a huge perm generation for your server?
Following the thumb rule it should heap space/4, so here it will be around 250MB only. Can you try once tunning this param to say -XX:PermSize=256m -XX:MaxPermSize=512m and restart weblogic server.