Perl – 214 chars
What, no perl entries yet?
$i=pop;@c=<>;@c=map{$r=$_;$u='';for(0..79)
{$K=$_-1;$R=$r-1;$u.=((&N.(&N^"\0\W\0").&N)=~y/X//
|(substr$c[$r],$_,1)eq'X')==3?'X':'.';}$u}keys@c for(1..$i);
sub N{substr$c[$R++],$K,3}open P,'>','out.txt';$,=$/;print P@c
Run with:
conway.pl infile #times
