Rhys,
1. Uninstall PD and then re-install - you might have a corrupt installation.
http://forum.cyberlink.com/forum/posts/list/2405.page
Subject: PowerDirector - information we request and tasks to carry out.
PART C
2. What is the file format of the media file you're trying to insert?
3. I'm not using PD5 but it would help if you specify what build version you're using. Look in in Help > About.
Dafydd