A few weeks ago I posted this:

Whenever I try to play the full timeline back in MM2, it
plays the sound but doesn't display the clips or titles.
(It won't even preview title text whilst I'm setting up a
title).

However, it will play both the sound and pictures for
individual clips from the collection before I place them
on timeline. The timeline only has a couple of very very
short clips, so there shouldn't be a length/size of clip
issue.

The same computer also still has MM1 on and will
successfully playback the timeline in that version.

and I received this reply:
If they are MPEG2 clips, it's probably a codec issue.

The clips I've tried are a WMV's but I've also tried
with avi files & still have same problem. Have installed
WMP9 for Windows XP, but still no joy.

Other ideas welcome!