Adobe ILLUSTRATOR 6.0, Online Manual, Page: 614 / 893

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When you make changes to a placed EPS
image using the application that created
it, the changes are automatically applied
to the Illustrator documents that contain
the placed file.
Note also that if you select a placed EPS
image and then replace it with any other
image, any transformation attributes,
such as scaling, rotating, or shearing,
are applied to the new place image.
To edit a placed EPS image:
1
Start the application that created the
placed EPS file and open the file.
2
Edit the image. When you have fin-
ished, save the document as an EPS file.
Save the file with the same name and in
the same location as the placed EPS file
you want to replace.
The file is automatically updated in the
Illustrator document.