The Adobe tech said it was an issue concerning Quicktime 7.2 and suggested I go back to 7.1.6.
I also tried swithching off multiproc in the preferences. Did not solve issue.
I am still hoping for a tip from you guys to solve this. Fingers crossed.
I am on a Dual Quadcore Xeon 3.0, 8gigs ram, os 10.4.10, AE 8.0.1.8
Thanks