Hi Michael,

>Does the folder happen to be the Temp folder?

No they're in a folder called outline test on the desktop. Isn't the temp folder a Windows thing? Never saw one.

>Do you get different behavior if you use File > Open inside of Illustrator to open the file rather than double clicking the file itself?

Tried everything. My Illustrator CS3 doesn't like the large PNG file. Although dragging the .png file into Illustrator worked but it came in way too large. We need another one with CS3 for testing.