Latest report.

Logged in as new User - FCPX much more responsive. I was able to remove what I think may be causing the problem ( something I couldn't do as my regular User).
Rendered section with suspect files - got through that OK. (Also something I couldn't do as my regular User).
Now rendering whole project.
Fingers crossed.

BTW what do the blacked out clips in the following screenshot mean? They're not gaps or slugs

That something is wrong...

then when I scroll back through the Timeline a couple of times they're back to normal.

Whatever that is

Yeah, that's just a screen redraw glitch. Nothing serious. What graphics card are you running? Are you on dual monitors from it?

ATI Radeon HD4850 512MB VRAM

only using 27" iMac screen.

BTW the project has completed a render for the first time since all this started.
Probably going in as new User.

Does that mean I should stay as this current User when in FCPX.

I have really appreciated your expert help and prompt replies.

Nah, was something about that project file. Right now, I'd duplicate it, and trash the original, just 'cause. Can't hurt... too much. They try it again as the original user. I'm sure it's just this one project.

A couple of other tools to help...
Onyx (Titanium Software) - System maintenance and lets you get to log files.
Activity Monitor - Built in, real time feedback and you can also sample file activity, real boon to find hangs.
Holding option key down while in Finder > Go will temporarily expose Library. Click on it and you can then click and drag to side bar if you want permanent access. BenB terminal command also works.

Yes, I know.

Keith,
You aren't by chance using photos that used to be linked to Mobile Me are you? This has been a problem and has caused multiple issues when libraries go from MobileMe to iCloud or even onto your iPhoto library. Latest iPhoto update supposed to fix this. Just a thought since you mention stills. Might be iPhoto causing hang.

Thanks VidGreg,

didn't have any photos on MobileMe.