Kevin telling me, your computer system is not good enough does not help.
+ why is this being blamed on my computer when my computer is fine with everything else + plays videos and games everywhere else perfectly fine, so many other forum posts saying that theirs is not working when they have state of the art computers let me guess is this adobe not fixing the bug in the updates so deciding to just blame it on everyone's hardware?
Apparently it is fixed by going on
Project > Project settings > General
Then to change it from the Mercury playback engine to the other, but mine is not changable it appears to only have mercury.
The specs say you should have a more powerful multi-core CPU, and more RAM.
- You only have a single core for processing, while an Intel Core2 Duo or AMD Phenom® II processor, or better, is recommended at the minimum.
- 4GB of RAM is recommended at the minimum, and you have only 2GB.
I would first suspect that your underpowered computer system is at the heart of your issues. Without enough RAM, you're starving your processing power. If you don't meet even the basic system requirements for your computer, I would not expect Premiere Pro to behave normally for video editing. It's great that it works with other video duties, like playing back online videos and game playing. Video editing is definitely more demanding than these other things.
Other people might have a different problem related to Mercury Playback Engine issues, but yours appears to be hardware related.
This all being said, you do seem to meet the minimum system requirements for Premiere Elements. Here are the specs for that: http://www.adobe.com/products/premiere-elements/tech-specs.html