It is a bad idea to have your antivirus enabled during the install of any software. It may block some needed parts to be installed.
If you haven't already done so, shut off your antivirus and do a repair on the software from the program disc. Do not do a reinstall because those are limited.
Since you have WINDOWS 7, the dxdiag did not give us the information I was looking for. I forget how to get the information on the crashes and hangs of your system. I'll try to look it up but someone may beat me to it.
In the mean time, your computer is woefully out of date. Try updating the drivers for your audio card an see it that helps. If not, update the rest of your computer's drivers.
Additionally, your computer is woefully underpowered for this video editing program. Make sure nothing else is running when you are doing video editing and that you have cleaned your hard drives of stuff that you don't use.