Eureka! I have discovered the answer to why iMovie3 behaves differently for so many users, with regard to sluggish performance. I am using it on an iMac flat panel 800mhz, with 500mb of RAM, running 10.2.3. I was also having problems with the play head moving a good five seconds after hitting the space bar, the program pausing with a beach ball every time I saved the file or tried to do an edit on a clip. The situation has made iMovie3 unusable and so I reverted back to 2.2, which is extremely fast and a relief to get back to!
After reading the various reports coming in, I realized that no users were documenting the length of their iMovie projects. Mine is over 1.5 hours long in the rough edit stage. I then tried loading a 12 minute movie and, voila! The thing works like it should. No more sluggish performance, nearly as fast as 2.2! It all makes sense to me now that the reason iMacs at the Apple store run iMovie3 with no problem -- they only have the two minute tutorial loaded.
In my opinion, the problems with iMovie 3 all boils down to the possibility that the engineers who developed this never tried it out on anything longer than a 5-minute movie project. Hope this helps others from spending any more time re installing OSX and wasting time on other fixes.
[Editor's note: I've had nearly no time to work with iMovie3, but did notice that it was much slower than iMovie2 on a 25-minute project that I loaded. Hopefully this is an issue Apple can address with a software update of some sort, as based on the reports, I think I intend to stay in iMovie2 for a while longer yet ... any other experiences out there with long vs. short movie lengths?]
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