FCE will not render real time

I just received a new iMac running version 10.4.10, 2.4 gig processor with 2 gig memory. When trying to render real time with FCE HD 3.5, the program always stutters and gives me a "Warning - Dropped Frames". I am importing AVCHD through iMovie from a Sony HDR-SR7. The clip properties show frame size 1440 x 1080, 29.97 fps, Apple intermediate, data rate 12 mb/sec, audio 48k. Under the RT tab, I have tried unlimited RT and safe rt (which usually shows a screen that says it needs to be rendered). I have tried the dynamic settings, as well as all combinations of video quality and frame rate. All give the same results, although lower video quality and frame rates allow it to run a bit longer before the warning. Under the sequence setting I have DV 48 khz.

How can I get the real time rendering to work? I have not yet even added a transition, which I understand from the forums are even more of a challenge.

Thanks,