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I presume you use 8.0.0?
Remember that Common Framework 220.127.116.112 that comes with VSE 8 is EOL and does not update anymore since february 2nd this year.
It is also notorious in CPU usage with later engines.
Look some more on the forum.
Yes, VSE 7 reached end-of-life in 2005 I believe and you really should be updating to XP SP3 so it wouldf appear that you are lagging in both respects.