Do I Really need to render this much all the time????

I just upgraded from a G4 to a MacBook Pro. I am using FC 5.0 HD.
I decided to use the Offline RT Photo Jpeg option to capture all my footage and edit on my MacBook. I figured I could render faster and store a lot more footage on the go.
Trouble is when I have Unlimited RT ON it can't even play back without dropped frames. So with Safe RT it requires me to render each and every clip I drop into the timeline. I have my sequence set to Offline RT Photojpeg but it still requires rendering just to play a clip in the sequence window.
I must be doing something wrong. The playback of the clips are also showing up as 1/2 the size in the viewer window. I have all my settings at the lowest quality for playback. Photos below.
Please help me get this project on the roll. I am stuck.
Thanks so much.
Intel 2.0   Mac OS X (10.4.7)  

Thanks David I didn't know that. I can't afford it right now given that I just spent a ton of money on the new computer but I will save up for it.
By the way, I copy and pasted my project into a new sequence. It works great now and I do have RT playback for slow mototion, titles, etc. I think my initial problem was that my sequence was NTSC DV and trying to play my Offline RT photo jpeg clips that I captured. That caused it to require rendering.
All is good now.

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