THE FACTS
celeron600@900, 384mb RAM, ATA66 7200spin 30GB drive, capture card based on bt878 chip.
The harddrive has been benchmarked at 50+ mb/sec burst, 30 average sustained. - MORE THAN ENOUGH for 640*480*16@29.97fps UNCOMPRESSED AVI (which i have noted to be about 26.7Mb/sec with CD audio)

THE PROBLEM
Am using VirtualDub with PICvideo mjpeg codec. At 640*480*16 NTSC (29.97) I am getting frame droppage.
I noted that dropping the 'quality' to [ 18 ] gives an average of 87 - 92% CPU processing time. It never goes to 100% and as i mentioned earlier the drive should be able to sustain the throughput.

IDEAS ?!?! tia