I'd say most would recommend at least the 'Plus' version which has many additional features including proxy editing. The 'Premium' has several third party additions. See http://www.magix.com/au/movie-edit-pro/ for more detail.
Yes proxy editing uses lower resolution copies during the editing process and substitutes the hi-res original only at the final export/burning stage.
I'm no judge for how well your machine well perform, but the new features are well worth the upgrade.
If you intend to edit HD video then your computer, unfortunately, is well below the mimimum specification required
Do bear in mind the the minimum specifications quoted are to be able to run the installed software and edit however they give no indication of the actual experience when editing - there are too many variables.
To find out if you can get a satisfactory user experience on your computer, download the trial version of Movie Edit Pro 2015 and test it.
The trial is limited to how much you can export and some features are not available until you purchase, however it will give you good idea how it performs on your computer.
Proxy file creation is just a parameter. You can activate the "Create proxy files automatically" function directly in the startdialog or at a later time in "File" > "Settings" > "Movie..." > "General movie settings".By default this option is not selected.
Well I have finally worked out how to edit in Proxy but it still wont work 100% as its still slow and freezing.
I have seen a video on Youtube of (Blender Video Editor) and the Proxy feature is built in. You upload your HD video clips and you can select between 25%, 50%, 75%, 100% of the playback quality in the preview window. This is something I am looking for so I dont have to mess around with external folders.
Do any of the Magix have this feature?
If not I will have to find another software but not Blender as I dnot like the layout as I am use to Magix. ARGH.