AIW Radeon 7500 Video Capture Drops Frames in Windows XP

Hi,

I have searched the newsgroups for solutions to my video capture
problem. I recently installed a fresh copy of Windows XP Pro, latest
drivers, and all critical Windows updates. I created Norton Ghost
images so I can experiment freely on the computer, and return it to a
previous state.

I want to capture home video to DVD MPG2 files. It seems my PC is
unable to record MPG2 in real-time. I have SONIC MYDVD and PINNACLE
STUDIO 8 with web updates. I can render to VCD quality, but drop
frames frequently at SVCD and DVD quality settings. AVI seems to
work, and the ATI MMC 8.5 VCR is OK too.

I know WINXP has services and background tasks that are more demanding
than my previous install of WIN98. Most of the equipment is under 1
year old.

The Machine Config:
Gigabyte GA-6OXT-A Mainboard (Tualatin Universal S370, i815EP chipset)
BIOS F7 and ACPI Setting Enabled
Celeron 1.3 Ghz CPU (Tualatin core w/ 256K L2 cache, 100 Mhz bus)
384MB Micron PC100 SDRAM
Sony DRU510A on IDE1 Master (no slave)
Aopen CRW3248 on IDE2 Master (no slave)
Promise ULTRA133TX2 controller for all ATA133 Hard Disks
Maxtor 120GB on Primary Master (System Partition and Swap File, no
slave device)
Maxtor 160GB on Secondary Master (Capture Files, no slave device)
ATI All-in-Wonder Radeon 7500 AGP4X
Creative Labs Sound Blaster Audigy 2 Platinum PCI and Live! Drive
3COM 10/100 Etherlink 3C905B PCI
Sterling V.92 PCI Modem

I know the Celeron may seem underpowered by today's standards, but I
thought rendering MPG2 on the fly could be done on a comparable
machine, such as a PIII 700 or so. Also, I thought this particular
Celeron is essentially the same as a PIII except limited to 100 Mhz
bus rather than 133, and without SSE2.

Other than this, the PC runs excellent. Is WINXP hogging all the
clock cycles? I have looked at www.videoguys.com to review the WINXP
Tweaks for video editing. Anyone dealt with a similar problem?

Respond to newsgroup only please. Thanks in advance,
Shawn