Working with large time lapse project

The Mac I'm running it on is newer Mac Mini. 2.6GHz quad core i7, 16GB RAM, SSD boot drive, Drobo disk array connected over FW800 holding data files.

So, if I'm reading this right, advice is basically to not use Final Cut itself to merge individual photos from time lapse sesion into video. Use an external app to make initial video, then use Final Cut to edit it.

Well, I'm in computer business, and photography/video is only my hobby. So my expectations of what is realistic for given CPU is about at right level. I don't have expectations that any piece of software will render video based off my original input files in real-time. I did let FC create optimized files. There was nothing preventing it to for example create much smaller copies for editing and preview, and use originals for rendering during final export. Or to pre-render composite clip and use that instead of extremely slow re-rendering from originals after every minor adjustment, when all I needed was to see small preview.

Some other pieces of software I tried don't choke on these like FC does. E.g. Picasa (which is free, unlike FC) works fine. I actually had to delete event and project folders from the disk to be able to recover FC into any kind of usable state. Otherwise it would take it hours just to start up!? Unfortunately, Picasa seems to have some built in limits (it renders this video only about half-way through for some reason). I'll give MPEG Streamclip Tom suggested a go. I see Compressor is paid app, and price is a bit too high for something that doesn't have trial mode (i.e. I don't want to risk spending $50, just to find out it doesn't work for what I need to do; low ratings and bad reviews on app store don't help build my confidence to blindly buy it either).

Well, I do think I had settings set up correctly, and all the right checkboxes checked out. And went through the fine manual, as well as several pages online on how to set things up and what all the different things do. It is always possible I missed something, of course. I'll go through it again this evening. Do you have anything particular in mind to double-check or pay special attention to?