Problem with external firewire drive and iMac G3

(all specs / info at end of message)
I have an older iMac G3 with an attached Firewire400 hard drive.
Everything works fine in iMovie streaming in video from my miniDV camcorder as long as the project is stored on the internal hard drive.
When I use the external drive (which I bought for this purpose) I am disappointed to find that the video and audio are choppy when importing video footage into a project stored on the external drive. The same problems exist when I play video from a project stored on the external drive.
I tried copying a small project from the external drive to the internal drive and when I opened the copied project which was on the internal drive, the video playback was smooth.
So what I am trying to determine, what exactly is the problem here?
Is the hard drive interface "too slow"?
Is the G3 processor "too slow"?
Do I not have enough memory?
Remember, it works fine reading video from the camera over the Firewire interface.
I am running:
Camera: Sony DCR-TRV11
External HD: Maxtor 300GB One Touch III (16MB Cache / 7200 RPM)
iMac G3 450 MHz 640MB SDRAM
OS X 10.3.9
iMovie 4.0.1

I would like to hear from others who may have tried to do what I am attempting. Others must have similar situations - what types of external hard drives work best? Is is necessary to upgrade to a G4 or later based iMac?
Am I wasting my time trying to do this on my old iMac?

Thanks!
Eric Peterson

Hi Eric,

video is a very processor demanding task. I think by playing from the external drive you are demanding a little bit too much on the nice G3 (and of its video card).

Cheers.

So do you think it would work OK on an iMac with a G4 or later processor?

Does the internal hard drive interfere less than the Firewire drive?

Also, what is different about an external hard drive and the video camcorder? They both have a Firewire interface.
Is there extra work streaming video from a hard drive vs a camcorder?

Thanks,
Eric