Vista - Capture and Playback of DV AVI Freezes and Flickers on the First F

I am having problems importing video from a Sony HDR-FX7 video camera. When
I import standard definition video in DV format using windows movie maker, I
see the capture in the preview screen. When I watch the AVI video in windows
movie maker, it looks OK. When I watch it in media player, I just see the
first frame stick and flickering with the audio playing correctly.
Sometimes, the picture is completely black but the audio plays. The video
won't play in Nero Showtime either.

The same thing happens when I capture video using adobe premiere and sony
vegas 8. I also tried capturing high-definition video. When I play it back
using Nero Showtime, I get the same flicker on the first frame and the audio
plays fine. (I couldn’t get media player to play the high definition *.m2t
file.)

Can someone help me? I searched but could not find anything. I tried
installing the fix for KB938194 and KB938979 but when I ran the install, it
said they were not needed on my system.

I also have 2 SLI NVidia GeForce 8600 GTS video cards. I installed KB
936710 which is a fix for Vista and dual video cards, but it did not help. I
currently have only 1 monitor installed. I have a Quad CPU at 3 GHz with 4GB
of RAM. My screen resolution is 1920 x 1200.

I would appreciate any help.

Thanks!