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My old computer, an HP Presario Compaq with only 512 Mo of RAM is, theoretically, quite unsuitable for HD monitoring. Before buying my Canon HDV camcorder the (well informed) salesman shook his head sadly and said I had better buy a new computer first. But I decided to give it a try.
It works! Admittedly, the capturing and editing preview is jerky and you think it will never be any good, but the final result on the TV screen is perfect, whether HD or SD (DVD).
Having never understood how to use smart proxy, I capture and edit in HD, never more than 30 minutes at a time, and delete everything once I have the finished product back on the cassette and on my external hard drive. I daresay it would all be smoother and easier with a better computer, but even with an old one it IS possible.

The output will be fine as in the end this is number crunching and you just have to give it time.
Unfortunately for work that entails editing to frame accuracy, it is no good for people to have jittery playback, but what is great is you are happy with your combination and get to see the results of your filming, keep it up.

More to the point, you are filming in HDV format, and that is MUCH MUCH MUCH easier and forgiving to edit, and requires far less computer resources, than AVCHD...