Dell Dimension 4450 Penttuim 4 at 2.66GHz, 64MB GeForce4 MX Grapic card, do not know model of motherboard, 80GB ULTA ATA/100 Hard Drive, 4XDVD+R/RW CD-RW combination drive, 3.5 years old

Computer randomly stops working for 1 or 2 seconds. Mouse curser freezes (then jumps to a new position if I moved the mouse during pause), if video or audio is playing the sound reverebs on a note for the lenght of the computer pause, and if you are typing it stops (no input if accepted from keyboard).

May this be a Processor or Motherboard problem?
Where do I start.

So far I have used Norton SystemWorks, Dell Diagnostics, and 2 other diagnostic software that specificly checks processor and motherboard fuctionality (one even places stress on the processor). These have found nothing.

It sounds like what happens when your processor is overtasked and is usually called floundering. Will not usually happen unless you have a relatively crap processor - which you don't. I would recommend going to the "Am I infected - What do I do" section of Bleeping Computer, and go to the part which talks about 'Is your computer running slow'. You would be surprised how many viruses/malware/adware can slip by the big brand AV packages...

Additionally, you may also want to check your memory. I have used memtest86+ and it is simple and works well.

rigel