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You can find the file through a search for the Adobe Illustrator CS3 Settings folder; include hidden files and folders.
You may use the hint Move the folder here: http://www.bugge.com/Family-and-friends/Illy/illy.html for further explanations and instructions.
As far as I remember you may also hold down Ctrl/Cmd+Alt/Option+Shift during startup of Illy to delete preferences.
Deleting the preferences is irreversible; moving the folder is more thorough, and reversible.
Thanks for the location. I'll test this out the next time the file does not save for me. Today of course I have not had an issue yet.
You are welcome, Scott.
If it is only one file, or certain files, it may be some other oddity than corrupted preferences.
The first thing to try, after saving somewhere and thus rescuing the file, might be to restart the computer and then Illy.