What are the Source Files in the Project?
If they are any flavor of H.264, say AVCHD, then that Core2 Duo will likely be too slow to allow for smooth playback. For efficient playback, a Quad-Core CPU is the absolute minimum, with a fast i7 being even better.
Also, though more so with non-H.264 footage, the speed of the HDD can play a big role. A 5400 RPM HDD will likely not provide great results, and a 7200 RPM, or faster, HDD will eliminate that bottleneck.
With CODEC's, such as H.264, the ease of playback is directly related to the CPU's speed. With many other types of Source Files, then the HDD speed comes into play.
About the only way to get smoother editing with any H.264 material, is to upgrade the CPU, or perhaps use proxy files. See this article for some suggestions on proxies: http://forums.adobe.com/thread/486598?tstart=0