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**This issue is resolved in ArcGIS 8.1 Service Pack 1**
ArcMap crashes with an "Application Error" after closing 'Layer Properties' from the 'Overview Properties' dialog box, if the reference layer in the latter dialog box is an image service.
The crash occurs when the Overview dialog box is trying to draw a MapView that is null.
This problem is addressed in ArcGIS 8.1 Service Pack 1. See Related Information section to download this pack.