karlo wrote:
Pentium 3, 700 Mhz, windows xp pro sp2...
I suggest 90% of your problems are here. XP Pro AND MSP together take a lot of resources. If you don't have a video-dedicated fast HDD, at least 512 Mb RAM and a finely-tuned machine with a good, dedicated (not shared) USB2 connection, your goose is probably cooked

I suggest you open Windows Task Manager/Performance when you attempt to capture and monitor the CPU, physical memory and PF usage. If the CPU even approaches 100%, the available phys. memory goes <100 Mb or the PF peaks to about 50% or more of your virtual memory. Make sure DMA is enabled on your video drive, as well as all the others.
Also, the codec and compression you use is important. Try a codec which allows a low bitrate/high compression. Even if the pic is too small and the quality poor, you can then gradually improve on this until your system hiccups, when you know you have passed the limit.
I seriously suggest that if you are serious about video editing, the moment has arrived to spend a few hundred whatsits and buy a computer worthy of the job instead of a machine that is probably the best part of 8 years old. You will find it increasingly difficult to find any software that will run well on it. Sorry!