Premier Elements 7 out of memory solution, but....

I finished making my first video in Prem. Elements 7. It's a 4 min long series of about 25 short clips with a few transitions and effects and cuts. I have a Dell Inspiron 1525 w/ 4 gigs of ram with Vista. I did a complete clean out of old programs, defraged hard drive, cleanup using cccleaner, turned off windows defender and all that junk, turned off screen saver, changed settings in control panel to optimum performance with no visual effects, turned off every available extra program through msconfig at startup, and shut down any non critical stuff in task manager. I still get the "running low on memory" message after a few minutes of playback or light editing and then a program shut down.
I requested help from Adobe and to their credit, they did answer promptly with suggestions about several possibilities including finding a bad or oversized clip or photo and eliminate it and many other things that did not work.
So I reverted to the old physical tape and splice magnetic tape days and split the project into 2 files. I exported each half to an avi dv file and it didn't crash in the process. Then I spliced the two mixdowns back together in a new project to make the one complete project.
I say all that to perhaps help someone in the same situation. So I think I've come up with the work around BUT....I've put two avi dv files (compressed I'm guessing) into a new project and when I export again to make a full length file, will the new file be doubly compressed losing quality from going through the process twice?
I'm using a Sanyo Exacti FH1 which has a default resolution of 1920 x 1080 60field/s - which I need to understand better. mpeg 4 files. I'm guessing if I use a lower resolution, Premier should be happier and not have to work so hard? 
Thanks for your time,
Thom

Thom,
Going back some years, before FW was as widespread, as it is now, I tried the same thing. I used several brands of USB 2.0 externals, mostly in the 200-250GB range. I had two problems:
1.) Delayed Write Failures were rampant - major problem with file corruption. This was commonly reported by many, who were trying to work to/from USB externals.
2.) Speed - those things were horribly slow and this was too frustrating for me. I gave up and just used the externals for archival storage, as they were originally intended.
I began experimenting with FW-400 externals. I go no Delayed Write Failures, but the speed was still horrible. I gave up on these.
The FW-800 (IEEE-1394b) external drives came out. Most were multi-connections w/ USB, FW-400 and FW-800. With a multi-chip card, first PCMICA and then ExpressCard, I found these to be very stable, fast enough to edit to/from, and I still do this. I use a handful of 1.5-2TB FW-800's to edit to/from and shuttle Projects between computers. Note: I have the drive letter for each of these set in the OS on each computer, so that my NLE does not get confused as to where the Assets are located. If I plug in external Z:\, it comes up as Z:\ on each computer.
Now, eSATA drives and plug-in controller cards (probably only ExpressCard, but maybe some PCMICA's) are common, and eSATA externals are available. These would be even faster than FW-800. If I was not so heavily invested in FW-800 drives, I'd go fully with eSATA. [Also, my workstation is out of PCI/PCIe slots, so I'd have to take something out.]
One caveat, if you go with FW, would be to detach all FW devices BEFORE you use FW to Capture from your camera. I never have anything else attached to that controller chip, when doing Capture. Many cameras will not even be recognized, if some other device is also attached. With some others, the Capture module in the NLE will not see the camera, even if the OS does. With still other, Capture will get halted, or many frames dropped. When doing Capture - make certain that there are NO other FW devices on that chip. Note: with on-board FW connections, one might have several connectors, but are likely to have them all fed into one single controller chip.
Hope that this helps,
Hunt

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