Collaborator has multiple (paying) clients. I'm a freebie friend. He's unwilling to change his system mid-stream. I understand that. He cannot afford to purchase a new PC, but that would be the ideal solution to me.
I will install the 32 bit version of X3 and try saving the projects and resend them to him. We're using an external HD to transfer files since our album is almost 64Gb of raw wave so far. I love the fact that both versions have no trouble handling the 120 + tracks we have going on some of these epic pieces!
Again, thanks to all of you for the insightful responses. (And the $20 upgrade is a no-brainer as far as I'm concerned!) I only wish I could afford to buy him a new PC... Then he could upgrade, but keep his 8.5 system.