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Very good idea starting your own new thread based on your specific issues and details of them. Although the subject matter may sound the same, it often gets confusing trying to exchange information with two different users at the same time in the same thread and trying to follow the discussion as the thread content gets entangled.
I just got finishing responding to your post of this thread's question's in rsayen06's thread where you initially posted.
For you convenience this is a copy of what I just wrote there:
SG asked rsayen06 several important questions to get at the core of that user's Premiere Elements issues. So far I do not see any answers to the questions. An the answers will be in those details. Although you have offered your project settings and saying that you have the same problem, they are but a small part of the troubleshooting equation.
1. What version of Premiere Elements are you using and on what computer operating system is it running?
2. You say you are putting pictures and music on the Timeline? How many pictures and what are their pixel dimensions? What type of music, what compression and file extension? What is the total duration of the Timeline content?
3. When you playback the Timeline content in the Edit Mode Monitor are you looking at the rendered or unrender Timeline?
4. When you say that you see distortion in the pictures...how are they distorted...
a. from the point of view of pixel aspect ratio, flicker, lines, other?
b. What do your computer resources look like in the way of installed and available RAM and free hard drive space? Are you getting any error messages associated with any of the project difficulties that you are encountering?
c. When you get to the burn dialog, what does the Quality Area show for Space Required and Bitrate?
We will be watching for your follow up.