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I'll second (third?) that. Do new, small, documents save properly? Does anything save properly?
Disclaimer first. It's been a few years since I did PostScript.
The stack shown by that error handler is either full of garbage or the handler is stupid (munging binary to ASCII). Could be part of App->driver communication if there's a 7/8bit issue. That'd could certainly cause angry range errors.
In Distiller settings, which File Compatibility PDF version are you using? I think the default is Acrobat 5/PS 1.4.
Again in Distiller, which Adobe PDF Settings are you using? The standard set, high quality, something custom? I wouldn't trust anything defined with an earlier version of Acrobat. On that note, I know you said v7 to v7.08 but what version was installed before 7? It's possible you have a dictionary incompatibility moving from old to new. Definitely back out to minimal standard settings both in Distiller and with a fresh document. If it still won't save then it might be fastest to uninstall (and completely wipe the Acrobat files) then reinstall. Or, if you get changing behaviors by forcing grayscale or other settings then we might be able to track things down without the annoying multi-step upgrade again.
Adobe probably has an Acrobat debugging handler just for this kind of situation but I'm out of the loop.
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There are a vast number of people who are uninformed and heavily propagandized, but fundamentally decent. The propaganda that inundates them is effective when unchallenged, but much of it goes only skin deep. If they can be brought to raise questions and apply their decent instincts and basic intelligence, many people quickly escape the confines of the doctrinal system and are willing to do something to help others who are really suffering and oppressed." -Manufacturing Consent: Noam Chomsky and the Media, p. 195
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