Just upgraded to a new system. I am working with Canon 550d DSLR footage at 720p. The source and program windows seem to playback slightly choppy no matter whether at full or half playback quality. My theory is that it may be my USB 2.0 harddrive. The processor is only at 25% and Premiere is only using @2.5GB of RAM out of 9GB total. I'm thinking I possibly need to switch to SATA harddrive. Any solutions?

CS5
Core i7 920 2.66
9GB RAM
NVIDIA GTX 260

Changing your drive is definitely a good idea; don't use USB for HD video. Definitely go SATA, if not RAID0 or another fast type of RAID.

Also, 9GB is an odd amount of RAM. How is it configured?

I don't know how it's configured. It's an Asus pre-configured system. I upgraded to SATA and although a definite improvement within windows, the choppy playback is still there. This leads me to believe it is not drive related either. Premiere seems to playback AVCHD files ok, as well as XDCAM EX files from a JVC HM-100. It seems to just be the .MOV files from the Canon SLR. Using magic lantern, I even tried lowering the datarate to @21Mb with no luck. Also, windows media player plays back the files smoothly. I'm starting to think it is a Premiere issue.