What are your machines specs?

You think it's the computer, not the controller?

Very possible or it could just be a defect controller. The easiest way to find out is use it with a different machine? If it's a different experience then there's your answer👍🏼

Defective* could also be the USB cable is faulty. Which is why it's best to test it with another machine.

What noise do you hear when adjusting pitch?

It's a static kind of sound. It almost sounds like dragging a cloth over a mic, just a garbled crackling. The sound is not constant, it comes and goes. I have been trying it today on a different computer and so far, have not reproduced the sound.
Same USB cable on both computers btw.

btw, these are the basic stats on the laptop I was initially using.
lattitude d630
intel core 2 duo t7300 2.0 ghz
3gb ram
32 bit windows 7
nvidia quadro nvs 135m

Do you see the USB drop light come on when it happens?

No
I sometimes see a yellow cpu light

Limiter light, not cpu.

Here's your problem. SDJ 1.8 or above no longer supports intel core 2 duo processors. You need at least an iprocessor (i3, i5 or best i7) w/4 gigs ram. You are running 3 gigs ram (under spec w/outdated processor) these newer versions require more CPU power however you can run any 1.7 version with that machine and you'll be fine.

If you scroll down you'll find the system requirements for SDJ in this link. You'll find it doesn't mention anything about intel core 2 duo machines. Eventually you'll need to upgrade your laptop if you want to stay current with new versions 1.8 or above. Link -> serato.com

Here's the SDJ download archive I suggest using a 1.7 version. You could always upgrade the RAM in your machine as it only has 3 gigs ram which is quite low and may help performance. SDJ requires 4g ram. Hope that helps
serato.com

I'm actually using SDJ Intro 1.2.8
Same thing?

Yes unfortunately SDJ Intro still requires an iprocessor as it is mentioned in the system requirements. SDJ programs are a CPU hog however Scratchlive w/your laptop would have no issue as it supports older processors and doesn't use anywhere as near as much CPU. Scroll down to find the system requirements-> serato.com

Here's the bad news you are only using SDJ Intro software (basic) and you're running into CPU issues already now imagine using SDJ (advanced) software which has more features including built in recording, more fx and features SDJ Intro doesn't so in the end you will have to upgrade your laptop asap if you want to have finer smoother performance. I know it sucks but SDJ software is another ball game and requires an updated processor. Hope that helps.

So from what I know about your specs I would have to say it is not the controller I think what's going on is your computer is struggling with USB power and it's affecting the performance of the controller. The only real way to test this is maybe try a diff machine with an iprocessor maybe a friends or maybe your parents. I'm willing to bet it's the computer and your controller is fine it's just struggling cause the laptop is lacking in performance. Hope that helps

When did you purchase the laptop? SDJ softwares seems to struggle with anything less than an iprocessor.

For example here is a machine that would run SDJ no problem as it has an i7 processor. www.amazon.com

Even an i5 processor would run fairly well. But it's best to use an i7 as it is the fastest processor and will analyze your files quicker www.amazon.com

Even something like this Asus would rock the shit out of what you have now.
www.amazon.com

Thanks for all the help. The laptop was second hand. I have a desktop with an amd fx 6300 and 8 gig ram I can use, but the laptop would have been more convenient.
It will be a while before I can upgrade on that.
I'll try to report back after I have used it on the 6300 machine a while, and see if the problem continues.
Thanks again.

you could always try older versions of SDJ Intro but not positive if it will help.