I am using a matrox RTMac card[/B]
There's your problem. I was also one of the suckers who bought that piece of crap. The drivers have never really been finalised for OSX, and god knows when Panther drivers will be avaliable.
Turn off anything Matrox-related, then turn it back on again and it should fix it, but your problems will come back (mine did). One thing I found was that with FCP set to handle realtime effects, you'd get no playback through the Matrox card, so you might wanna check that out. Trash FCP preferences is another fix.
One other thing - your computer is below the min system requirements for FCP4 (minimum is 500Mhz) - does it give you any other problems?
Next month I'm upgrading to a G5 and the Matrox card is going in the trash - doesn't seem like you can even give them away these days. Matrox seriously ****ed up with that card - thry've let it become obsolete way too quickly.