Issues with Premiere Elements 8...

Just purchased and installed elements 8 on my rather old pc (like 5 years) which I've been upgrading constantly to avoid having to buy a new one. Everything seems to work fine, there's some slight lags when rendering clips etc, but the main issue is when I try to use to use the time stretch tool. I'm just trying to compress a 20 or so minute long shot into 15 seconds, and every time I do, it will render the shot and then crash eventually, without playing it. Can anyone help me with this really annoying problem and maybe give me some advice as to how I can maybe get a better performance from the software?
I'm running XP sp2 (I just factory reset so I'm still updating for sp3)
Nvidia Geforce 8400 gs
3gb ram
pentium 5 2.66GHz

Well, I see two instant issues: lack of defragmented free space, plus the bottleneck of partitions. This ARTICLE will give you some background on partitions, especially for video-editing.
Next, what is the connection type for the external? If USB, then there could well be issues there, as the computer can encounter read/write errors, as the programs will shove material, and ask for more, much faster than that connection type can provide. USB externals are fine for archiving, but can be very problematic, when trying to edit to/from. I use FW-800's with no issues, but eSATA would be even better.
Do you have a laptop (probably mentioned above)? If so, can you use a PCMCIA, or ExpressCard to go to eSATA externals?
If a desktop, I would certainly look at adding at least one additional internal HDD. Not sure where you are located, but Fry's (Western US retailer) just had WD 1.5TB SATA internals, with full installation kit for US $149, and if one uses say ATA-300's, they had a 2TB WD for US$89.
Good luck,
Hunt
[Edit] Just noticed "PAL," so forget Fry's, unless they have opened some UK/Euro stores - sorry about that.

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