How much does RAM matter with Encore

My system is a dual 3.06 xeon system with 1 gig of ram. I use a VT3 system by newtek for editing. To use my edited files from VT3 in encore, I basically just save my file as an avi file. VT3 doesn't actually make my edited project into a single avi, it compresses the timeline information in a way that it can be used as an AVI. This helps avoid having to render it out to a certain file format.

The problem with this is that Encore freezes up when I try converting one of these avi files to a timeline. Is this because the ram?

Josh