Well, I can playback both your AVI and MPG samples in PrPro with no issues. Let's try to move on:
1. What actually happens when you try to playback your timeline in PrPro?
2. Can you playback your timeline, if you switch Mercury Playback Engine to Software Only mode?
3. Can you 'playback' you timeline, if you make footages offline?
4. Can you playback a timeline created out of stills?
