I work in 30×42 in Photoshop as well and keep the res to 200 for optimum print quality and file ‘manageability. But you could easily lower the resolution to around 150 to reduce file size.
In terms of performance, if you can, upgrade your RAM to at least 32mb (preferably more), I would make that the first choice to boost some of the PCs ability to handle large files. Some of mine get upward of 1gb unflattened which is just a fact of working in PSD.
Also, large graphics files are best handled by high performing video/graphics cards. Look into upgrading your video card for another good kick in performance.
Defintely work in native PSD until you are ready to print. You’ll save the overhead of having PS re-interepret the format while working.
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