* Install all Windows Updates
* Install latest QuickTime (currently 7.6.6)
* Install latest graphics drivers from manufacturer's web site
* Install latest sound drivers from manufacturer's web site
* Cleanup your disk drive(s) and defragment them
If problem not solved then: Got a Problem? How to Get Started
Insanity is hereditary, you get it from your children
Welcome to the forum.
Along with Neale's suggestions and the questions posed in that linked article, please tell us two things first:
What is the format & CODEC involved in that footage (part of Neale's article), and tell us more about the WD external. Is it a USB 2.0, and are you trying to edit to/from it? What is the disk speed of the WD unit?
This is not to diminish the rest of the questions, as they will provide very useful info, but those are the first two things that I see as potential problems.
The first thing i would suggest you is check with the file from the internal drive Copy it to the desktop and then import it to the project.
Make sure you are selecting the right Sequence presets matching up with your file .
Switch off Playback GPU and Background Rendering from the preferences in the edit menu
If it gives out the same problem then install the camera utility disk since it will have the required codecs for the file in case the file is from the camera .
This is aimed at Premiere Pro, but may help
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 ALL OF THE DETAILS asked for in the FINALLY section, the questions at the end of the troubleshooting link... most especially the codec used... see Question 1