The http://forums.adobe.com/community/premiere/hardware_forum has MANY discussions
My 3 hard drives are configured as...
1 - 320Gig Boot for Win7 64bit Pro and all program installs
2 - 320Gig data for Win7 swap file and video project files
3 - 1Terabyte data for all video files... input & output files (*)
(*) for 4 drives, drive 3 all source files & drive 4 all output files
Search Microsoft to find out how to redirect your Windows swap file
Time for a new PC. Just hope you can salvage the investment you made in memory, but I doubt it.
The Phenom quad core is slow, the video card does not support hardware MPE and maybe, you did not mention that, the disk setup can be improved.
What you want is generally described here: Adobe Forums: System requirements for CS5
Also have a look here: Benchmark Results