more ram (at least a gig) would probably help.
probably the easiest way to get (at the very least closer to) real-time preview is to make clips in vdub(/mod) instead of in premiere. That way, premiere has less information to go though (which on a P4 single core, or pentium D or celeron D [hopefully not a celeron though] is a good thing)
you could also use bait and switch outlined
here
a little more prep work, but a good way to get around system limitations.
given those options I think that your problem lies in the second one. taking clips from an hour+ long chunk of footage means that once you hit that clip, premiere has to search through the big chunk of footage for the particular clip that you took from it. Do that over and over and the time it takes to do those searches becomes more evident