I noticed something I didn't see before on ati's site the video driver that I downloaded for my Rage Fury Pro video card said this:
This driver offers DirectShow capture support only. could this be causeing the problem I'm having with frames getting stuck for a few seconds but I can see the movie continueing on in the background? and it also said this : If you are using an ALL-IN-WONDER or VIVO configuration and require Video For Windows capture support an alternate driver/software combination is required. The driver is different from what I was originally using. Do you need video for windows capture support for doing video capture? My system spec are

XP 1800
45 gig wd boot drive
2 80 gig wd caviars raid 0
512 meg pc2100 ram
rage fury pro 32 meg vid card