CS4 Premiere (and Encore) crash on opening with blue screen

Question

I have been having a terrible time with CS4 Premiere Pro crashes over the last month or so.  Initially PP would just disappear from the screen as it was opening up, and if it didn't crash it was quite often after the Matrox RT.X2 logo came up after selecting the project to open.  I had less problems starting a new project than opening a previous one.  Sometimes it would open and crash during the work process without warning...forcing me to save after every change.  Then it got worse.
I looked to the Adobe CS4 bulletin on crashes and it was suggested to update drivers.  The first driver I looked at needed an update (Nvidia Quadro FX1500 256 MB) so I had their download service do the work and installing.  During the process it stopped with 'Nvidia display pannel extension cannot install due to a version mismatch.  Resetting the display drives may solve this problem' without any suggestions on how to do that.  I have 2 Dell 24" monitors slightly different from each other but worked great before all this.
From this point everything got even worse.  System Restore to the previous day did nothing.  Everytime I tried to open Premiere (or Encore) the whole computer crashed (blue screen) and restarted automatically.  I can no longer play any video without crashing -- not an AVI, MOV, WMV, etc.  Not even a finished DVD will play on the computer now.
I have the latest versions updates of Premiere Pro 4.2.1 as well as the Matrox RT.X2 tools.
While the Nvidia driver update situation made the situation worse, I was having problems with Premiere Pro CS4 way before this with 'instant' crashes and no warnings.  Strange that Photoshop CS4 works just fine as this has evolved into a video problem...and I need your help to get PP running again.
I'm not a techie so please reply in novice language.  When CS4 came out it took Matrox quite a while to get off 'beta' tools upgrade so I waited until it was off beta (April 2010) and had my computer hardware expert upgrade my computer with CS4 and the new Matrox install -- way too technical for me to do.  It worked great...until about a month ago when all this started.
I don't think the equipment I have now on my 2006 computer would work with CS5 - maybe you can look below and tell me.
For reference, here is my equipment:  XP Professional SP 3; AMD Athlon 64 x 2 dual core processor; 4800+  2.41 GHz, 3.25 GB RAM; Nvidia Quadro FX1500 256MB; 2 Dell monitors - 2407WFP and ST2410; Matrox RT.X2; 2TB WE Raid Edition SATA 16MB; Blu-Ray burner BDR-2058BK; Pioneer 111 Dual Layer DVD Rewrite Burner; Sound Blaster Audigy4 24 Bit; Built in FD controller 2 IDE on the main board.
Brian

Answer 1

Thanks harm for your suggestions but I'm lost.  I am not a techie.  Went to your thread on building a new computer and it was way way over my head...so I'm back here asking for your suggestions as I couldn't even figure out how to copy/paste my equipment listed above and post this message there instead.
Took my box back to the vendor who put it together for me in 2006 for $6000 and he's going to try and get it up and running again for me.  I told him about your recommendation to lose the Matrox and he doesn't think it's the problem if I want fast rendering, etc.  He says he's used RT.X2 in a ton of systems he's put together and work just fine.  He's going to try getting my present computer running, first of all without any new additions and then make suggestions.  It ran beautifully under CS2, so much so I skipped CS3 and was very late adding on CS4 ... and that's when the problems started.  Perhaps CS4 was just too demanding for my 2006 equipment...which probably means CS5 is even more demanding.
So....two questions:
1. If I upgrade what I've got, where do I start?  Or is it worth upgrading or better to start brand new (budget problems no doubt)
2. If I start brand new, what do I put in the new box?  I looked at your 3 different cost areas and the budget config is probably not what I need but warrior level too high.  Even the middle road you recommened looks a little low for what I want to do making BR disks, but you would know.
I assume some of the current equipment I've got could still be used, perhaps even the Matrox if that keeps costs down by not having to replace it with something else.  There is a new C drive for my programs and a new 2TB internal hard drive for files (which I mirror backup to an external 2TB drive).
Could you make some build recommendations that I could give to my vendor?  Many thanks.
Brian
ps...how do you copy/paste on this forum?