Welcome to the forum.
Which H.264 CODEC do you have installed?
Three popular ones are Apple, Lead and MainConcept. Many users report better results with either of the latter two.
I actually have the Mainconcept codec installed. I am currently trying the trial version of Lead. The video is 720p 23.976fps. Is there a chance that it is my system graphics cannot play it back. I tried exporting to just a quicktime file and it played perfect, no choppiness or jumping. Thanks
A link with many ideas about computer setup http://forums.adobe.com/thread/436215?tstart=0
And even more hardware discussion http://forums.adobe.com/community/premiere/hardware_forum
Including this post about 3 possible builds http://forums.adobe.com/thread/598040?tstart=0
Work through all of the steps (ideas) listed at http://ppro.wikia.com/wiki/Troubleshooting
If your problem isn't fixed after you follow all of the steps, report back with the DETAILS asked for in the questions at the end of the troubleshooting link
Thank you for your post. Very informative. After working at it last night for quite a bit I found that if I export the H264 to the adobe tv setting at 720p 23.97, it is perfectly smooth. Looks pretty good. Am I losing any quality in that setting as opposed to the other setting?