This contour model has a lot of triangles, too many I think for it to let me ungroup it. I got the rubyscript to simplify contours and ran the original topo contours at the default 10° level. Apparently it wasn't enough, because look at the level of detail.
So, any pointers would be helpful to get this to a functional level of simplicity would be helpful.
Task One: Simplify contours...Task Two: Draw contours.... Task Three: Explode Contour Model.... Task Four: Drape roads
Is that right?
I am on a Macbook Pro, 2.16 GHz Intel Core Duo, with 2 GB of memory.
MY OS is current, 10.5.8.
SketchUp version 7 (7.1.6859)

Okay, I am actually modifying my approach, I got a DEM of the site and modeled using Draw Contours, so it's a more elaborate model, (see images) which I would still like to apply the Google Earth image to. I will follow your instructions here, unless there's a difference with this approach.
when I apply the Smoove tool with a 600' diameter, the image fractures on the triangles.