I have a similar spec Mac, an 8 core 2008 Mac. However I have a lot more ram (24GB) and I use an NVidia Quadro 4000. I also use very fast eSata RAIDs for my media that can pump around 200MB/s or more as well as a SSD boot drive. While I’d love for things to be faster, I get tolerable performance in most situations now.
Premiere Pro CS 5 and 5.5 is pretty resource intensive. It can handle native H.264 (your Canon codec) but if your Mac isn’t high end, performance might suffer. The Nvidia 4000 for me is to render real time effects, for those that are CUDA compatible, it probably isn’t the source of your beach balls.
The beach ball is usually an indication that the Mac has run our of RAM and is swapping ‘virtual RAM’ on the hard drive. If you’re hard drive is slow and also doing other things, the beach ball results. Switching to and from applications compounds the problem.
Use the Mac’s built in ‘activity monitor’ to see if something else is running that’s affecting things, but I think you have a combination of low RAM and slow startup and media drives. You should also try to keep the media separate from your Startup / applications drive.
You might also have something ‘crashing’ and relaunching in the background that might be slowing things down. I recently upgraded to Lion and I was confounded by slow PPro performance. It turned out to be that I had an old Quicktime plugin, 3ivx, that was crashing every few seconds, and it was affecting PPro performance. I used the Mac’s built in ‘console’ app to see what error messages were being spit out.
Good luck.