Yes.
Under VIEW>EXTERNAL VIDEO>ALL FRAMES is selected.
Another strange phenomenon… Set as my MAIN monitor I have a nice Samsung SyncMaster2253lw… which is a decent lcd screen. I tried switching the MAIN screen to be the older monitor so that the newer monitor would become the DCD display screen and still… same problem.
Could this be an issue of RAM? I am running this system of FCP with about 100mb less RAM than technically required however, I have noticed ABSOLUTELY NO issues in FCP as a result of this.