Well, to anybody who had the same problem as I (above) but no solutions, this is what I did:

I transfered all my data (external hard drive) over to my dad's computer, and reloaded Pinnacle. It worked BEAUTIFULLY there!

So I ended up getting a new computer:
2.8 GZ
Pentium 4
TWO 160GB hard drives (= 320 + my 120GB external = 440 GB!!)
Brand new GE-FORCE FX5700 Video Card.

Least to say, my problems are over and I won't look back.