To expand on Ryan:
When you have a single conductor carrying current there is energy lost in the form of heat. The more current, the more heat. A bare wire can handle a lot of current without any problems for the bare conductor itself because of the high melting point of the metal conductor.
But when you need to insulate the conductor from other conductors, the insulating material usually has a much lower melting point than the bare conductor itself. The insulations lower melting point becomes the limiting factor.
Taking several insulated conductors and placing them in close proximity effectively places several heat producing sources close together. Less of the heat that is generated in each conductor can disipate into the surrounding enviroment causing each conductor to run at a higher temperature. These higher operating temperature conditions combine to make it so each conductor can not carry as much current without aproaching the safety point before melting the insulation.
Shane
