You haven't told us enough about your camcorder for us to make specific recommendations (Is it a hard drive standard-def cam? AVCHD?), but three things should be considered.
1) Have you ensured that, when you started your project, your project specs match your camcorder specs? This is vital, and it affects every other aspect of your workflow. In most cases, if you've selected the correct project settings, there will NOT be a red line above the clips on your timeline until you add effects or transitions to them. You can learn more about this in my free 8-part Basic Training tutorials at Premiere Elements support site Muvipix.com.
If you're video is from a standard definition hard disk camcorder, you will just need to render often. It's the nature of working with this format, unfortunately:
2) If there are red lines above the clips on your timeline, you must render your video regularly by pressing the Enter key. Once the video is rendered, the red lines will turn green and your video should play much more smoothly.
3) A dual-core laptop is okay if you're editing standard definition video. But, if you're editing hi-def or, more so,AVCHD video, you may not have enough power to edit the video, and that could account for your jerky playback.
Steve, thank you for helping me out. I got some specs from my camera, I hope that this provides you enough info.
My videocamera is a standerd definition hard drive camera, a SONY DCR - SR52.
This camcorder is a standard definition hard disk camcorder.
When you start a project in Premiere Elements, you should go to the settings and select the Hard Disk Camcorder settings for a standard video.
Unfortunately, the nature of this camcorder is that you must continually render the video as you work.
But, if you use these project settings and render the video, as I indicated above, whenever you see a red line above the clips on your timeline, your computer should be adequate to edit the video.
Thank you for the information.
Your laptop should be able to edit that SD footage well. The biggest limitation will be the I/O sub-system, i.e. the HDD's. With the laptop, I assume that you have only a single physical HDD. If it is a 7200 RPM unit, it should be OK. If it's a 5400 RPM unit, then there might be slow, or poor playback.
For a little background on Rendering, this ARTICLE might be useful, along with Steve's tips.