When you add the video to the timeline, is there a yellow-orange render line alone the ticker along the top of the timeline, above the clips? (A screenshot of that would be helpful.)
The yellow-orange line would indicate a mismatch between video specs and project settings, which could account for the lugging.
Otherwise, it would seem to be some sort of performance issue. Can you give us specifics: Which processor do you have and how much free, clean, freshly defragmented space is on your hard drive?
Also, you appear to be using Windows 7. Have you manually gone to Windows Update to ensure you have even the non-critical updates that aren't loaded automatically?
And have you got the latest version of Quicktime?
Save your project other then C.
Same goes for media files.
For your camera you need dslr 30p @ 29.97