Editing HD video on Macbook Air 11"

HI, I'm looking to buy a new computer have some questions about Macs. I've been using a PC for sometime now but it's really outdated and I need to upgrade. I'd like to upgrade to a Mac if it can be done for a reasonable amount of money. If not, I may have to stick with a PC. I've been looking at refurbished Macs and have been pleased to see a number of Mac Minis and Macbook Airs for under $900. I was especally interested in a 2011 Macbook Air 1.6ghz i5 with 4GB RAM and a 128GB SSD. I know it would be sufficent for my usual daily commputing (web browsing, office, itunes, word processing, etc...) but I'm also looking to get a 18MP DLSR that takes full HD video. I would only be putting together short (3-5min) videos occasionally, nothing to big. I realize the Macbook Pro would be much better suited for editing video but I'd rather spend the couple extra hundred dollars on a better camera or camera lenses.
So, can the Macbook Air (even if it's not the fastest) do a reasonable job editing hi-def video?
Additionally, I routinly edit RAW photos and use Photoshop Elements on my current desktop. I would like to get a Mini Display Port to VGA adapter for the Macbook Air so I could use my bigger Dell flatscreen. It's not to fancy (only 1280x1024 and 17") but it would be more fitting than the Air's screen for Photoshop/video work. Would it slow the Macbook's peformance much? 

I've been editing 1080i footage from a sony NX5 on mine (which is a late 2010 core2duo 11")
it's not the fastest but it works fine. The only real downside is rendering - which takes a while.
I'm really happy with it though, it's not an editing powerhouse but it'll do me fine
the i5+ models should be a lot nicer to work with.
Still - use the external display if you can, final cut seems rather cramped on 1366x768.

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