Do not waste time working with the disk system. What you want to optimize is the CPU, get the fastest that you can but if you real want the best performance it will require an upgrade the motherboard/memory/CPU to the i7 CPU, or even better yet two of the new Xeon 5500 series processors. This suggestion is backed by years of benchmarking Premiere.
For your budget memory might be the only way to help.
Taking Bill's advice in to consideration with regards to speed improvements, here's what I recommend for disk config:
C: Get a smaller hard drive and reinstall the OS/programs here. Mine is 75GB and is only half full. 500GB is a waste as you really don't want to put anything on this drive but Windows and programs.
D: Current 500GB drive repurposed as a Project/Scratch drive.
E: Break out the RAOD 0 into separate drives, use one for Media storage only.
F: Use the second 650GB for Exports.
Total cost ~ $50 for the new smaller drive.
Recommended ram installation for Premiere CS4 is 8gb for a high-performance system. This comes direct from Adobe's white paper:
Also, I wouldn't strip down your RAID 0 so quickly. No other hard drive configuration can achieve the transfer speed that a RAID 0 can. I personally hit 135 MB/s with my Western Digital Raptors consistantly. You can benchmark your drives using real video formats with AJA Video's disk drive speed test:
Furthermore, there is some advice that can be found on other popular forums that suggest running the OS with no paging file in order to force the apps to use the available ram installed in the system:
I am currently running 8GB on my Vista 64bit Ultimate setup and have my paging file set to the minimum, 16MB. I have my OS and Premiere installation on my 75GB Raptor system drive, and my project/media on my RAID 0 Raptors. I have been running this setup for the last month pretty heavily and have never encountered a low memory error, or system crash.
For further help in optimizing Premiere's performance with your system take a look at the following link at Adobe's site: http://kb.adobe.com/selfservice/viewContent.do?externalId=kb405744
When you post benchmark results, like you did from the AJA testsuite, it is beneficial to know what and how you tested. Otherwise you results are utterly meaningless. A result of transfer rate is not in the AJA test and the number 135 MB/s seems lousy in comparison to what I got with the following settings (BTW on a raid30):
I wouldn't strip down your RAID 0 so quickly. No other hard drive configuration can achieve the transfer speed that a RAID 0 can. I personally hit 135 MB/s with my Western Digital Raptors consistantly.
That's true, however such transfer speeds are wholly unnecessary for the camera formats typically used with Premiere. Only in the case of Uncompressed will those kinds of disk speeds make any difference.
there is some advice that can be found on other popular forums that suggest running the OS with no paging file in order to force the apps to use the available ram installed in the system:
That's just really bad advice. Windows only uses the swap file when it runs out of memory. As expected, the article did cover the kinds of system instability that can arise without the swap file. That it didn't happen with 8GB installed only means the available RAM was not fully used, in which case the swap file would not have come into play, making the test irrelevant.
Here's a good analogy. The RAM is like the gas tank in a vehicle. The swap file is like the extra gas can in the trunk. Normally you do all your driving using the car's tank. Only when you run out of gas do you pull over and use the gas can. Same with Windows. Normally RAM is used. Only when RAM runs out is the swap used. And just like the motorist is stuck if there is no gas can in the trunk, so to does Windows get stuck if there's no swap file. In the TH test, the car with a small tank (512 MB) and no gas can (swap) got stuck on the side of the road pretty frequently, while the car with the much larger tank (8 GB) and no gas can kept on running. But this had nothing to do with the missing gas can, and everything to do with the larger gas tank. Had they tried to use more gas than the tank would hold (use more than 8Gb of RAM at the same time), they too would have run out of gas and gotten stuck on the side of the road without that gas can.
The point here is always keep that gas can in your trunk, and make it as big as you can. It won't interfere with normal driving, and is very critical to continued operation when the main tank runs out of gas.