Managing big Canon 7D files in Premiere CS5.5 with an average computer
Do a complete offline edit, it you want the quickest editing, use something like DV NTSC Quicktimes and edit on the fly, it will be SD but you never see the difference, then online to the original by replaceing footage back to your H.264...btw play around with your settings in Premiere and do some tutorials, there shouldnt be a reason an H264 file does not play on that system with those specs.  Transcoded is needed to play 5D or 7D footage within FCP but not within Premiere