FYI, in case anyone else is having similar issues. Recently updated to Windows 7 64-bit, but could not place larger files in an Illustrator CS3 document and kept getting the error "Could not Place due to Insuffient Memory" but I had 8 gigs of RAM and 1/2 a Tera-byte of harddrive space so I knew that wasn't the issue. The cure was to set the Compatibility Mode to run in Vista - Service Pack 2, to do that right-click on the executable Illustrator file, scroll down to Properties, click on the Compatibility tab, and in the Compatibility Mode box, set it to Windows Vista (Service Pack 2). Illustrator run perfectly after that.
This fix was easy to find, and easy to use.
Thanks! Very helpful (10points)