Dear LyX Users, Thank you everyone for the very helpful recommendations. I finally narrowed down what my problem was. Turns out, it wasn't related to RAM, LaTeX, LyX or number of floats. (Just for the record, XeLaTeX and LyX 2.0 are doing a marvelous job with 153 figure and table floats and more than 300 individual images. I think that is rather neat.)
The problem is related to my very complicated Ubuntu installation. I've been using LyX from within a VMware virtual machine on my MacBook Pro. I do this because managing packages within Ubuntu is very easy and trying to make things work on Mac can be very hard. (After much trial and error and otherwise head banging, I've just decided to run a virtual instance of Ubuntu.) Anyway ... I have a number of shared directories so that I can access my files from both operating systems. I've noticed on a number of occasions that Ubuntu crawls to a halt if the drive happens to be busy. I think this is due to the way that VMware implements shared folders, but I honestly don't know. But as all of my files are stored on the main hard drive (not in the virtual machine), launching xelatex with a large file will often cause Vmware to hang. It also so happens that trying to convert a large SVN repository to a Bzr branch will cause the same thing. For the past three days, I have been converting one of our larger SVN repos into a Bzr branch so that we could open source the code (of course, this was being done in the Ubuntu virtual machine). As soon as the conversion finished, I found that I was no longer able to reproduce my problem. The book magically started to compile without problems. It turns out that the errors I was receiving were due to individual instances of xelatex stalling and then getting killed by the OS. That is why I was seeing bizarre errors in the debug screen of LyX, the xelatex jobs weren't finishing completely and subsequent runs were unable to correctly parse the code. Once the hard drive was no longer busy, xelatex was able to successfully complete it's run and create a beautiful PDF of the book. Not sure what the moral of this story should be, but at least I can report that the problem has been solved. Cheers, Rob