... this is taking over 4 hours....

You're doing something wrong :).

The following shows Perl processing a 32 GB file in-place, finding and replacing 30% of it's contents in under 25 minutes; on a single cpu 512 MB ram machine. (the process only uses 3 MB of ram).

#! perl -slw
use strict;

our $BUFSIZE ||= 2**20;

open my $fh, '+< :raw', $ARGV[ 0 ] or die $!;

while( sysread $fh, $_, $BUFSIZE ) {
    tr[123][123];
    sysseek $fh, -length(), 1; ## Updated per Dave_the_m's correction 
+below++
    syswrite $fh, $_;
}
close $fh;
__DATA__
[ 8:31:52.64] P:\test>439181 data\integers.dat

[ 8:54:43.92] P:\test>dir data\integers.dat
 Volume in drive P has no label.
 Volume Serial Number is BCCA-B4CC

 Directory of P:\test\data

14/03/2005  08:54    34,359,738,368 integers.dat
               1 File(s) 34,359,738,368 bytes
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