System memory and Moviemaker performance

I have just started playing with video capture so I apologize if my question
is an amateur one...

I have an AMD Athlon XP 2.4, with 512 MB of RAM and a 200GB 7200 RPM hard
drive.

I used my capture device to capture about 40 mins of video, in MPEG format.
The filesize was about 608 MB. When I tried to import this clip into
MovieMaker, it grinded for about 20 minutes until finally responding again.
The hard drive and entire system strained non-stop during this time. Once it
did respond I was not able to do anything with the clip without the
never-ending grinding again.

I was watching Task Manager and did not see Moviemaker use any more memory,
so I am not sure what it was doing, but it is certainly not useable with a
clip of this size. I have imported some smaller clips and the response was
much faster.

What do I need to do to speed this up? Do I need to have more system emory
than the size of the files I am importing? Can I import a file without
having it automatically cut it up into "clips", which also seems to take some
time?

Any advice appreciated.