Are you using PhotoImpact 10?
I've had this happen before, not only with PhotoImpact, but with Photoshop 7 as well, same exact message, something about iedit causing an error. This leads me to believe that it may be something with my computer since it does the same thing with both programs.
I find that it usually happens when I'm trying to do too many things at once, (several windows open at a time) and a good reboot brings everything back up and running. It doesn't happen often enough to bother me much though, I make sure to save a lot and try not to stress my computer out too much with too many programs open at once. Is your computer an older model with less memory? Mine is almost 5 years old and needs some upgrading (or just replacing, LOL!).
As far as moving to another software program, since I've had the same problem with Photoshop as well I'm not sure that would work for me. And some of us prefer PhotoImpact over the others...like me.
I'm comfortable with it's desktop, it's very powerful as far as creating realistic elements, it's a very easy program to learn, and it doesn't cost me a fortune to upgrade!
I am going to check the website out for patches though, thanks for the suggestion Pesto. I'm careful to save often so I don't lose much when it does happen to close up while I'm working on something, but it can get annoying.