Erorr message saying Not enough RAM to run minecraft server, but I have enough?

"Error occurred during initialization of VM"
"Could not reserve enough space for 3097152KB object heap"

I have 8GB RAM, 7 Usable
I'm only using 3.1GB of ram so I should be able to run the server with 3GB of RAM but it won't let me…

Restart pc or re-install minecraft

Generally, that means you are allocating more ram than what is available. It could be that you have a 32 bit Java, which is limited in how much heal it can allocate:
http://www.oracle.com/...heap_32bit

This may or may not be your problem… Start with less ram allocated, like 1GB and slowly work up to see where it fails…