Hi Steve,
Thanks for getting back to me. My DEM has 182 x 291 rows and columns. I'm running ArcMap 10.0 on a an old desktop (Don't know what info you need, so here's a bunch: Windows 7, Intel Core with 2.40 GHz, 4 GB of RAM, 64-bit OS). Within the Geostatistical Analyst Wizard I selected the "kriging/cokriging" option, entered my rain gages for dataset 1, the DEM for dataset 2, and left the other settings on default (ordinary Kriging, output type = prediction, no transformation, no order of trend removal. Then I clicked "next" and it got stuck.
I killed the process and will empty the cache as you recommended, but would really appreciate some more guidance before trying again!
Thank you so much,
Sarah