10.0.4 performance much worse for me...

Luis! Success! I was able to get the permissions and sharing of the drive figurured out, and FCPX 10.0.4 plays back FINE in the new user account. Using original media, no glitches or dropped frames. In fact, it is far better than in 10.0.3 in my initial tests. So does this point to bad plist files lying around somewhere. I repaired permissions on the drive. What would be the next step in cleaning this up?

Internal SSD running apps and a 1 TB internal drive for media.

I haven't read all three pages of this thread, so I apologize if someone already pointed this out, but I think you would be best served by having your media on the fastest drive, which should be the SSD. You shouldn't be running applications off of your fastest drive. You need to let FCP X access all your media as fast as possible. It populates the thumbs quickly and doesn't stutter during playback, etc.

I'm thinking about getting a PCIe card that has 480 gigs of screaming SSD and only use it for the media on a per project basis.

So, we didn't know how to troubleshoot one remote system huh? You had claimed earlier to have repaired your permissions, the error I made was to clarify if you had done so on the new user account. So how about thanks for my advice?

By the way, you should mark Luis' answer as "solved my problem"

Virgil S. We've only determined that the program runs fine on another user account. Nothing has been fixed with my regular admin account, so I consider this far far away from being resolved. We performed only one test.

Now I need to get to the bottom of what I need to do to correct the problem. I'll give credit where credit is due. "Thanks".

OK! After all of the agony, I finally got in touch with Apple Support, and they were able to walk me through the correct steps to cleanup the problem. For everyone's knowledge, the drop in system performance was simply due to some bad system support files and caches. First we trashed the all of the .plist files in the Library/Preferences, then booted up FCPX. Still the playback problem persisted. Then we went back to the Library and trashed the Final Cut Pro cache folder as well as the Final Cut Pro Application Support files, and boom. Back in business. I should have gone this route in the first place.

I want to thank everyone here, virgil s and Luis, especially who took time out to follow up on my rants and to give me helpful hints at troubleshooting. I'm new to Lion, and am someone who does not spend a lot of time doing quirky maintenance and trouble shooting with their systems, so I admit to being a bit impatient and prone to petulance. (Especially after I had just dropped nearly 4K to get a reasonably fast system to edit on!) And BTW, my pet peeve about not being able to roll back to previous versions was not entirely true. You can, if you are using time machine for backups of all of your files. But with that remedy, you are forced to retrieve all of your event folders and project files, from before the upgrade, so you would potentially lose the ability to use what you had progressed on editingwise immediately after the upgrade. Still for me not the most elegant solution to a sudden bottleneck situation, but something to fall back on in an emergency.

So I am considering this problem solved. I hope Joshua, the original poster has solved his issues with 10.0.4 as well.

Glad you figured it out. enjoy

Awesome news, and helpful info for the rest of us. Super glad you got the problem solved and that the system you dropped big money on is now performing as expected. Now, back to being creative and not an engineer. Cheers mate.