[Ann Bens]

Your camera has a hard disk which means the footage is avchd and not hdv.
This also means that you cannot capture your footage instead you have to copy the footage from your hard disk (camera comes with software to do so) to your pc and then import it into Premiere.
Unfortunalely CS3 does not support avchd. CS4 does but you will need a Quad Core to get the job done.

[Ann Bens]

This normal behaviour. As soon a you click anywhere in the timeline you are ready to make an edit, so Premiere stops playing.

[Ann Bens]

Hold down the ctrl key and dubble click on the sequence in the project window.

[Ann Bens]

General advice hier is finish in CS2 and start fresh in CS4.

[Ann Bens]

Actually i am on HDV but i use this method:
https://invertedhorn.axspace.com/hdv2dvd_basic.html
More reading on the Adobe CS3 forum.

[Ann Bens]

If you are on a trial mpeg is not supported.

[Ann Bens]

Check your interprete footage.

[Ann Bens]

If you want good quality SD from HDV with CS3 this is the way to do it:
https://invertedhorn.axspace.com/hdv2dvd_basic.html
More reading about this subject on the Adobe CS3 forum.

[Ann Bens]

Yes you can but this will mean major quality loss.
Or you can mask the person with the track matte key.

[Ann Bens]

Its probably an avi with an excotic codec like divx.
Run the file through GSpot and see if the codec is installed.