Hey Matt, do you have a copy of AECS3 to test on that system? It would be interesting to see if you have the same issues...

I've had this problem twice in the past, using the same NVidia card but w/various versions of the drivers - I have to agree w/Matt that it is a driver issue.
As you can see from my post above, in Sept. I installed the 176.04_quadro_winxp64_english_whql version of the drivers and AE has been performing great since then. Previous to the release of those drivers, AE was noticeably clunky - and to no avail I tried various openGL settings in the NVidia control panel to resolve the issue.
Because AE is critical to my workflow, I'm hesitant to upgrade the graphics drivers... I'm also hesitant to upgrade to CS 4.

I understand the challenge this presents to the AE development team if the problem only occurs w/a certain % of users (though I wonder what % it is, because I don't know if everyone would notice and I don't know how many users are also doing 3D (or gaming) on the same system and therefore have a high performance graphics card).

Since the issues generally involve the smoothness of AE's interface (even as mundane as switching comps), would it be possible to add a few more switches to control how AE takes advantage of the hardware openGL?