J.S.
My daughter who is 13 now, healthy, normal and sweet (most of the time) was the same way: VERY sensitive and intense when she cried. If she bumped herself or got her feelings hurt, we would see the breath-holding and had several seconds' warning that IT was coming; then...WAAAAAAAH! It was so cute, yet heartbreaking. I honestly can't relay any medical opinion on it; I never asked or worried about it. Maybe I should have. Whatever advice you get here, I would recommend following it up with your Pediatrician. From a psychological standpoint (not that I'm an expert, just very passionate on the subject): I would really embrace this trait in her, and not try to "It's o.k., shhh, that's enough..." her, to prematurely stop her crying. I recommend, "Oh sweetie, I know it seems terrible, I hear you, Mommy's here," and let her VENT. She may just be intensely sensitive, which means she'll be intensely intuitive and empathetic - and probably highly intelligent.
J. Smithson
Loving Hands Learn 'n Play
http://www.lhlearnandplay.com