Error message: Display performance will be poor due to incorrectly operating graphics card or driver

Question

Greetings:
I've been getting this message lately, using clips of .avi footage from a non-HD Flip Video camcorder. First off, my computer has beyond what I'd need to edit this footage—it's an HP dv 3085dx notebook with 6 gigs of DDR3, Intel Core i7 processor, NVidia GeForce GT230M graphics card. It's a loaded machine. That's not the problem.
The problem is that the red circle with the X in the lower left-hand corner of the screen shows up and gives me this message moments after I start each new project. However, when I click on it, the message is grayed out and it doesn't give me the option of checking the details. Read on to find out how this is affecting my videos....
When I playback unrendered clips, the playback works fine. After rendering, however, the clips play back with jerky glitches and flashes that weren't there during playback of the unrendered footage. I've downloaded the latest driver (195.81), and that hasn't improved anything. Here's a link to a video I posted on YouTube, to illustrate the types of glitches I've been getting: http://www.youtube.com/watch?v=uFeCh6q1JTQ The glitches are particularly apparent during the stretch between 0:20 and 0:28.
I'm still pretty new to this craft (read: I haven't tried other software yet), so any insight into this would be greatly appreciated.
Thanks!
P.S. Might there be some downloadable Premiere Elements software updates that would alleviate the problem?

Answer 1

Thanks for your response. My notebook has a 7200 RPM 500 GB hard drive with about 320 GB free. The .avi files were brought in to PrEl from a WD Passport external drive with about 60 GB (of its 400 GB capacity) free. The project was also being saved to the WD drive.
I have a Windows 7 64-bit system. I have all the latest versions of my NVidia graphics card driver and Quick Time. I also downloaded the PrEl 8.0.1 update from Adobe. Hardware/software-wise, I'm pretty sure I'm in good shape; I'm thinking there might be some settings that I might want to play with.
The camcorder is a very basic Flip Video USB camcorder by Pure Digital Technologies (Model #: F260W). It records in .avi format; when you plug the USB in, you can access an application that allows you to save the videos. I use this to save them to the local drive (C:) and then I copy the .avi files from there to the WD Passport. The Passport drive is where I bring in the media into Premiere Elements, to keep space free for the OS to run smoothly.
The project is set up this preset: NTSC > Hard Disk, Flash Memory Camcorders > Standard 48kHz. As stated earlier, the error message shows up pretty much instantly. To be exact, it shows up about 5-30 seconds after I start a project. Unrendered clip previews playback fine. The raw .avi files also play fine in Windows Media Player. The glitching occurs after clips are rendered.
So, I think that pretty much covers the four steps from the article you linked me to, plus your questions in the above post. There really isn't much of a workflow before the error occurs. I simply drag a clip into the timeline, render it, and the playback gets that splotchy glitching. Now, it could be that the WD external drive doesn't have enough space or speed to run a Premiere Elements project, but if that's the case, why would the error message point to the graphics card?
Thanks again, truly appreciated.