adobe premiere pro CS3

Hello there

premiere pro is actually running fine for me at the moment, but there is a slight issue that is quite annoying and I'm just wondering if its something I'm doing wrong or that my machine is just not good enough.

I'm edited footage that was shot on a HD cam (720p, 30fps), but which was converted from MP4 to .mov (premiere is meant to take mp4 but... mine doesnt). So I've basically set the project specs to HD, 720p, 30fps, but when playing an scrolling through the files in the source monitor, it's awfully laggy, which makes it very hard to see what I'm doing. Have I selected the wrong kind of project to edit this footage or is my machine just not good enough? (once rendered, clips play perfectly well in the program monitor)

thanks