Sorry to read of your problem, really.
Lets take this piece by piece, and see what's wrong if possible.
You say the editor works OK and presumably allows cutting, enhancement etc etc. At that point can you play the edited changes in situ using the small screen display on the editor ? Yes?
Now, can you play it again but in the larger display [preview in media viewer] ?
As to using the KLM codec, I have installed K-Lite Mega Codec Pack 4.8.5
and it works very well, so its probably not an incompatibility.
Just for testing can you try producing the following...
Output a small size (Finished <50Mb) video to .AVI then .WMV version 8, .WMV version 9
if that works try a larger file until it crashes or slows down too much.
On version 7 Power Director I found that in Vista with 1.5Gbytes ram a video of X minutes long would take about 2X minutes to produce.
With Version 8 and 4Gigs ram in Vista it takes about 1.3X to 1.5X depending on how much editing and PIP tracks are involved in the video.
If you can't solve the problem - Change the problem