This happens when the part you want to edit in place is already opened in solid edge; close it and the edit in place function will back to work.
I'm having exactly the same issue, but do not have the part open (prior to editing in place - you can see this in the images as the Switch Windows button is grey'd out). I'm finding so many little issues like this since upgrading to ST8...! I have the latest Maintenance Pack installed (#5).
See images below:
Thanks very much for your prompt attention, really appreciate it. This has solved our issues. None of us were aware of this shortcut.