To me it sounds a lot like a RAM problem. Though Illustrator isn't as much of a RAM hog like Photoshop, it still needs a decent amount to work properly. The hang up could be that when you are jumping back into the bigger file, you are needing more RAM than is available and that is why it is hanging up.

Another reason is if you are still trying to work with Illustrator 10 in Mac OSX. That mean that Illustrator is running in 'classic' mode (System 9) while the rest of your computer is running in OSX. Apple made early versions of OSX able to do this so that it can older versions of programs not written for OSX. The problem to this is that OSX and System 9 were set up to handle memory differently. So this could be what is doing it to you. If this is the case, you might want to try re-booting into System 9 to work on the project and booting in OSX for other stuff.

I'd also set your AI scratch disk prefs to HD, not Startup. Be sure to restart the app for changes to take effect.