You do not need one of the "MPE Supported / approved" CUDA cards if you do not want MPE hardware action in your workflow.
but... suggest that you do need a Adobe Hardware supported graphic card. Check the Hardware / system requirements.
(It not as double dutch as that sounds)
BTW - update your current drivers if you havent already.
BTW: MPE hardware is well worth having ...so why wouldnt you?
The GPU you use really doesn't matter; occasionally, the driver you use does, however. Updating to a newer driver can often remedy bizarre display issues.
When I brought in some AVI footage
This might be an issue, as well. "AVI footage" is synonymous with "box of stuff." What's in the box is the question... or in this case, what's in the AVI is the question. Is it DV? MPEG-4? Something else? Some codecs (e.g. the stuff in the box) will cause display problems, but you'll have to tell us what's in the box.
The power supply is weak by contemporary standards, but if it's enough to power your computer, it's enough (generally speaking). Changing the PSU is not going to correct the problem.
The exact version of nVidia driver can, indeed, cause problems with PPro CS5
And, your power supply is not large enough for the higher powered nVidia cards... which have 2 power connectors on the card and require a LOT of power to run
But, if you don't want to get into major rebuilding, many ATI cards work just fine for CS5, albeit without hardware MPE
My CS5/AVCHD 1st Impressions http://forums.adobe.com/thread/652694?tstart=0 includes a link to what I built
Added... to further what Colin said
Read Bill Hunt on a file type as WRAPPER http://forums.adobe.com/thread/440037?tstart=0
What is a CODEC... a Primer http://forums.adobe.com/thread/546811?tstart=0
What CODEC is INSIDE that file? http://forums.adobe.com/thread/440037?tstart=0