Cooperative diversity is a promising technology for future wireless networks. In this paper, we consider a cooperative communication system operating in an amplify-and-forward (AF) mode with a pilot symbol as-sisted modulation (PSAM) scheme. It is assumed that a linear minimum mean square estimator (LMMSE) is used for the channel estimation at the receiver. A simple and easy-to-evaluate asymptotical upper bound (AUB) of the symbol-error-rate (SER) is derived for uncoded AF cooperative communication systems with quadrature amplitude modulation (QAM) constellations. Based on the AUB, we propose a criterion for the parameter optimization in the PSAM scheme. We discuss how the pilot spacing and the length of the Wiener ?lter should be chosen under the constraint of a tradeoff between pilot overhead, estimation accuracy, and receiver complexity. We also formulate an power allocation problem for the considered system. It is shown that the power allocation problem can optimally be solved by means of a gradient search method. Numerical simulations are presented to verify the correctness of the theoretical results and to demonstrate the benefits of the parameter optimization.