Character animation workflow between AE, PS, and PP. Help!

I just finished my first animation test. Please check here:
http://www.youtube.com/watch?v=GN7Xjzxi568
My general workflow... (Creative Suite 5 on a 2011 27" iMac 2.7GHz quad-core Intel Core i5, 4 GB RAM, 1 TB 7200rpm HD, AMD Radeon HD 6770M w/ 512 MB)
The character is created in PS. I draw the character and then cut out each body part as a separate layer to make a puppet for animation in AE. Since I am making my characters in PS, I need very large files because I may want a close up on the characters face for instance. The .psd that I import into AE is around 7000x7000 file.
As you can see in my video, my backgrounds are video. I am using a Canon 5DII shooting 24fps @ 1080p.
Let's just say I had many, many issues getting the video above to work. I don't want to recount what I did as it was most likely the wrong way to do it.
My question is, what should my workflow be?
Should I cut the background video in Premiere Pro, and then do a dynamic link between PP and AE, do my animation on top of the cut video sent from PP, and then send it back to PP after I'm done?
ALSO, the 18 second video above took around 2 hours to export. My final output is always 720p, so should I be batch converting all my video before hand to 720p as it will make editing and exporiting a lot faster? Will adding RAM to my computer make rendering/exporting faster, or will that just give me general performance increase? It's only about $100 to upgrade to 16GB of RAM and I should probably get on that. Or is rendering/exporting only reliatn on the CPU/GPU?

My good friend Angie Taylor is one of the best at this style of animation and she has put up a bunch of free tutorials. You can find them with a quick Google search. This is one of my favorites. It shows you how to tie all of the body parts to a single control layer so that you can simplify the animation procedure and speed up your workflow. You should also check out her blog.

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