Video editing & playback issues: Adobe Premiere Elements 8

Hello all,
I have made several attempts at transfering HD video  files from my camcorder to my PC and then editing.
When I try to play the transferred file, it is a little choppy and then gets worse as I edit it.
Here are my specs/config:
System:
HP Pavilion a6720y
Windows Vista 64 bit
NVIDIA GeForce GT 440
AMD Phenon 9550 Quad Core 2.2Ghz
6GB RAM
640GB SATA drive, 7200 rpm
Camera:
Sony HDR-XR150
Editing Software:
Adobe Premiere Elements 8
I copy the video files from the camcorder to the computer via USB 2.0.
When I connect the camera directly to the TV the video plays without any issues.  So I know the AVCHD files are "good" and I suspect they are also possibly "good" on my hard drive, but just cannot be played or edited appropriately for some reason.
One input I received was that due to the nature of AVCHD files, I should convert the video to "I-frame codec" and then edit.  Can Adobe Premiere Elements do this?
Any other thoughts/ideas?
Thanks for any help.
D

6GB RAM
PE version 8 is 32bit, so is not using all of your ram
640GB SATA drive, 7200 rpm
I edit AVCHD (with PPro) with THREE hard drives
My 3 hard drives are configured as...
1 - 320Gig Boot for Win7 64bit Pro and all program installs
2 - 320Gig data for Win7 swap file and video project files
When I create a project on #2 drive, the various work files follow,
so my boot drive is not used for the media cache folder and files
3 - 1Terabyte data for all video files... input & output files (*)
(*) for 4 drives, drive 3 all source files & drive 4 all output files
Search Microsoft to find out how to redirect your Windows swap file
http://search.microsoft.com/search.aspx?mkt=en-US&setlang=en-US
Trying to use only ONE Hard Drive for Video Editing
You are a music conductor, with a baton that you use to point to various parts of the orchestra... this is like Windows pointing to various parts of the hard drive to do Windows housekeeping or to load program segments for various functions
Now, at the same time and with the same hand... while still using the baton to conduct the orchestra... pick up a bow and play a fiddle... this would be doing something with your video file at the same time as all the other work
You as a person cannot do both at the same time with the same hand
A computer is a LITTLE better, in that it can switch from one kind of task to another very quickly... but not quickly enough for EASY video editing
You need AT LEAST two hard drives (separate drives, never a partition http://forums.adobe.com/thread/650708 for more) with Windows (or Mac OS) and software on your boot drive, and video files on a 2nd drive so the boot drive is not slowed down by trying to do everything
I find that the three drives I use work very well for me, for editing AVCHD video... some people use a 4th drive, so video INPUT files are on drive three and all OUTPUT files are on drive four... I only bought a mid-tower case instead of a full tower case (my bad... but had to fit in the space available on my office desk!) so I use the three drives that will fit
Depending on your exact hardware (motherboard brand & model AND USB2 enclosure brand & model AND external hard drive brand & model) AND the type of video file, you may... or may NOT... be able to use an external USB2 hard drive for SD (Standard Definition) video editing
Steve Grisetti in the Premiere Elements forum http://forums.adobe.com/thread/856208 and Jim Simon in the Premiere Pro forum http://forums.adobe.com/thread/856433 use USB externals for editing
A USB3 hard drive connected to a motherboard with USB3 is supposed to be fast enough for video editing (I don't have such, so don't know) but eSata DOES have a fast enough data transfer for video editing... I have not used the eSata Dock below... for reference only, YMMV and all the usual disclaimers
http://www.amazon.com/Thermaltake-BlacX-eSATA-Docking-Station/dp/B001A4HAFS/ref=cm_cmu_pg_ t

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