Looks like you don't have enough real ram to work on that size file. You might try to "purge all" (history, undo etc) & that may free up some space in memory & try to save again from Photoshop. Note, it's not the file size that 's a problem, it's your ram. In Illustrator, try saving to version 5, that will delete any metadata that may be in the file (providing of course you don't need it). I.E., if you are working with mid/mif files all the names, zips, point data etc will be in the file.