Len,
If you're still having problems you may want to try re-saving the TIFF in another format. It seems that Illustrator CS2 doesn't really like TIFFs. I often get out-of-memory errors while trying to import relatively small (20 MB) TIFFs, and upgrading my computer to 2 GB RAM didn't make any difference. However, if I re-save the image as a Photoshop file, Illustrator imports it without any problems. With MAPublisher you can then apply the georeferencing data from the GeoTIFF to the placed Photoshop file.
If you don't have Photoshop, try saving your image as an RGB TIFF or maybe a JPEG.
Finally, are you working with a 32 bit TIFF? That could cause problems with Illustrator and would also produce a silhouette if incorrectly converted to 8 bits. I wrote a crude Java program to do this conversion, but Photoshop CS2 will also do it.