I believe what you see is not frame drops - it is just the speed...

You need about 23 frame per second to see a fluid motion. If you get below this figure your eyes and brain will see single steps.

What Catalyst does is just reducing the speed of the playback. If you have an original movie at 25 fps and play it at 50% speed you will have 12 or 13 fps - and sure this is not moving fluently.

To achieve good result with slower movies I suggest re-rendering them with After Effects using frame-blending or depending on the content even better pixel-motion.