You need to post project DETAILS
Exactly what kind of video (codec) are you editing?
Exactly what are your project settings?
I see a red line on your timeline, which indicates a mis-match between file and project
See the 2nd post for a picture of the NEW ITEM pointer http://forums.adobe.com/thread/770072?tstart=0
I am editing .mov files - one from an ipod, and one from a laptop webcam...
Preview file format: I-frame only mpeg
General Project Settings:
Display Format: TC
Audio Display Format: Audio Samples
Capture Format: DV
I think you might be right about the new item button.... but I've already edited this thing, is there a way to fix that now?....