The error: Users were reporting that when they attempted to do bulk edits on a large list, they received a timeout error and were prompted to either discard or retry their changes. It was nearly impossible to make changes to more than one line at a time using the datasheet view and edit function. The users were located in different buildings and had either the Office 2007 or Office 2003 client installed and were using either IE7 or IE8. I also tested and the problem was not limited to a particular type or size of list, but it was limited to one site collection.

The error message was "A timeout occurred while communicating with the server. Changes to your data cannot be saved."
Attempting to Retry the change would bring back the same error. The only option was to Discard.
The end users were quite patient but they typically would make 10-15 changes at once to certain properties in this list. The only work-around was for them to make one change at a time using the standard "Edit Properties" function.
The solution: After a week of researching and coming up with nothing, I began to research the "Access Web Datasheet" function and came across a few posts that led me to believe this may be a database problem and not necessarily a SharePoint application problem. After all, the error message did state that a timeout occurred while communicating with the server. The configuration for this web application was a small farm - the database was on a separate server. The database administrator re-organized the index for the database using SQL Server Management Studio. Voila!! After my own testing and confirmation from several users, the problem was gone.
Yes, this seems like a rather simple solution but it was not obvious, at least not to me. The users were, to say the least, pretty happy we got this fixed. To quote one of them, "You rock!!!" That, of course, made my day. :)