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I suppose if you have your media and render files on an external file it'll save some hard drive activity within your PowerBook.

I rarely edit with my PowerBook on my lap though. Most of the time I connect an external keyboard and mouse, and use it with its lid closed with my 21" CRT monitor (IBM P260) at 1600x1200/90Hz. It's a comfortable setup because 1024x768 (the PowerBook's resolution) can be limiting. I have edited a few movies at that resolution but now that I'm used to higher resolutions and seeing more of my timelines on the screen and bigger canvas / viewer windows, it's not easy to go back.

FCE 2 and FCP 4 are way faster than their predecessors. There are way more real-time previews in the current versions. I had a real-time preview of four simultaneous DV streams. That was with the help of a fast external FW drive (RAID 0 of two drives), and with my 1.33GHz PowerBook which at the time had 512MB of RAM.
 
I have basicly what you want in a pb and for FCE (final cut express) it works great, but i'm not that serious about video editing. If your doing this as a profession and don't need a portible, get a G5
 
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