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The yellow line indicates that your Project/Sequence Preset does not match the footage. Could be Frame Size, PAR, FPS, etc.
As for an intermediate CODEC, I like Lagarith Lossless. It has always been good, and playback has been smooth - so long as my Preset matches my footage. It's also free. Jeff Bellune had a recent post, where he sang the praises of two other intermediate formats. I can't find my notes right now, but he'll probably stop by, before I do.
Have you looked at Dynamic Link? It's part of the Creative Suite (not included in the standalone PPro and AE products). Read up on it in the help files if you haven't already.
This is a totally different way of working than the traditional export/import used between apps. It's not a flawless solution (uses a bit of your system resources), but it certainly is about as lossless as you can get, since no rendering or intermediate files are created, and all edits, filters, effects and assets are kept intact. Also, any edits to the AE comps will flow through to PPro without any re-rendering at all.
Again, this is very different than previous workflows, since there are ZERO temp/proxy files created when using Dynamic Link.
As an aside, on a dual core with 3 GB ram on a 32-bit system, your resources aren't exactly tuned to editing HD of any flavor. Also, if you plan to stick w/ Adobe in the long term, keep in mind that the next versions of PPro (and I believe After Effects) will be 64-bit only. This means you will have to upgrade to (or rather, install) a 64-bit OS to work with Adobe CS5.
I assume when you say 1920 x 1080P HD material, you are talking about AVCHD, right? In that case your system is underpowered and brought to its knees by that material. If it is XDCAM-EX you may be OK.
So what sequence settings did you start out with and does that exactly match what you shot?
Cheers for your help ...
I'm not shooting with anything, I'm actually doing timelapse footage from stills, building the footage in After Effects and then attempting to export something for editing in Premiere Pro.
What about my machine is underpowered? I've actually pulled back from using a 64-bit Windows 7 installation because 64-bit Premiere was so crash prone. I have 4GB of RAM installed, but I know i'm not getting access to all of that in 32-bit Windows. The processor should be more than ballsy enough to deal with editing HD video. Christ I used to edit HD video on my old Apple Powerbook G4, which was a 1.8GHz single core processor. My 24" iMac has only 2GB Ram and a 2.4Ghz Core2Duo processor and it edits full HD footage no problem.
I get the process of making sure that my sequence settings are the same as my footage, but there's such a paucity of options to choose from when setting the sequence settings.
If I export out of After Effects as an uncompressed AVI, what should my sequence settings be in Premiere?
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As a rule of thumb, consider these minimum requirements for anything resembling comfortable editing:
DV: Core 2 Duo @ 2.66 GHz, 4 GB RAM and 3 x 7200 SATA disks
HDV: Core 2 Quad @ 2.66 GHz, 4 GB RAM and 3 x 7200 SATA disks
AVCHD: i7-920 @ 2.66+ GHz, 6+ GB RAM and 3 x 7200 SATA disks
HD: i7-920 @ 2.66+ GHz, 6+ GB RAM and 4 x 7200 SATA disks
Now comfortable may differ from person to person and is largely dependent on what you are used to. If you have never driven a car, only a bicycle, you may say, why do I need a car? If you have only used a Fiat 500, you may consider a BMW 3xx as overdone, but if you have driven a Porsche Boxter, you may longingly look at a Ferrari or a 911. So it is all relative, hence the above is called a rule of thumb.
I can't believe you need to pump your machine up so much just to edit HD video!
Have a look at the http://ppbm4.com benchmark results and look at the results and configurations. Best, do the benchmark test yourself and submit the results to Bill (and if you want to me by PM) to see how your system performs in relation to others.
Pumped up is also a relative term. Sure, in comparison to the first IBM PC on a 4.77 MHz 8088, a Core 2 Duo is fabuously fast. The first 5.25" 160K floppies are no comparison to a 1 TB+ disk now, but isn't it human nature to always want to go faster, lessen rendering times, while at the same time modern programs require more and more resources all the time? Consider the footprint of the CS4 MC at a whopping 18 GB. That is all using resources.
Just this morning, someone asked me what I did during encoding/rendering, during the wait-stage, and I replied that I hardly have any waiting to do. I have a pretty decent machine, middle-of-the-road, so encoding a SD timeline of 5:30:00:00 (yes, 5.5 hours) to MPEG2-DVD with quality at 5 and AC3 sound takes around 20 minutes. That is around 16.5 times faster than real time.
Now when you have to do this often even a 20 minute break gets long, but I would guess that on your machine that encoding time would be 200+ minutes and then it gets really boring.