This is a brand new camcorder from Sony that may be just a bit advanced for a $90 editing program. (The camcorder retails for $2,400.) But it also appears to shoot both traditional miniDV as well as HDV.
If so, which format are you shooting to?
And which project presets are you using? If you're using the correct presets for your project, when you place your video clips on the timeline there should not be a red or green line above the clips. Is this happening?
As Steve points out, one's source footage needs to exactly match the Project Preset. You will need to determine exactly what the specs. are set to in your camera, and then choose the appropriate settings when you chose New Project Settings.
If you are not certain of the settings, you can run one of the Captured files in the freeware program, G-Spot. It will give you the complete set of specs. for that file. It's probably easiest to post a screen-cap from G-Spot with all of the info. Hint: use the little "camera" icon in the lower-middle of the forum editing screen's Toolbar. Here:
Here's a look at the G-Spot GUI with a file Open in it:
I opened a new project, the difference is that I did not realize to adjust the initial settings, now if I put in HDV the difference is that the video runs a little slow and half of the video captured it loses the audio, the program requires 3.0 ghz processor and mine comes up to 2.6GHz, think that the problem there?
What are the specs. of your AV files, from either the camera's settings, or from G-Spot?
What new Project Preset did you choose?
There is likely a mismatch still, though some formats can horribly stress a computer, but let's rule out the Project and the Assets first.