Insufficient memory was available to complete the operation

Hello,
I am having trouble using the "place" function to drop a JPEG with a size of approximately 7.6MB into Illustrator CS5.  I am creating cross-sections for drill hole planning, and I use the images exported from Geosoft's Target as a base.  From there I interpret the geology, precious metal occurences, plan drill holes in Illustrator.  I am by no means an expert with Creative Suite, but I know enough to get around.  My computer has an i7 processor, 8GB RAM, and 750GB of hard drive space.  My intentions are not to be rude, but do not waste my time assuming  I am a complete idiot (e.g. I rebooted my machine, rebooted the program, checked to make sure I have plenty of space available, etc...).  I worked all night last night without issue, and create all of my cross-sections using this method.  I typically never get any issues, but this problem has randomly cropped up twice (the last time it eventually stopped).  Unfortunately, I do not have time to magically wait for Illustrator to right itself as I need to present to my Sr. VP on Monday. 
Cutting to the chase:
I exported a drill hole fence from Target as a JPEG with a file size of 7.6MB.  I then opened up my cross-section template (.ai file) in illustrator, went to File|Place| and accessed the file (I also tried to File|Open).  Rather than performing the operation I get the error message "Insufficient memory was available to complete this operation".  I then restarted my computer, and attempted this again.  My CPU usage is fluttering at 3% +/- 2%, and the Physical Memory is at 31% usage.  This seems pretty "buggy" to me, but as I said I am a "beginner user" and perform very basic operations in Illustrator.  I have looked around the forums and have seen this issue come up several times, sometimes with very complex advice.  I have no plug-ins installed, and have not fiddled with any settings. 
Thanks ahead of time for any help provided.
Scot

Thank you, Mike!  That worked for me.  Although it doesn't really answer the question I am not too concerned since 99% of the time I have no problem.  I guess that is a follow up to the other suggestions as well.  I worked from 5PM to midnight last night, and made several end product cross-sections.  Then this morning it just decided that it was going to stop working. 
For now I am not going to ask too many questions, and will just avoid directly importing the JPEG's from Target.  When I get more time perhaps I will try to actually get to the root of the problem as opposed to using a work around.

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