I would first choose Break Apart in Premiere Elements, and then post a screen-cap of your Timeline in Expert Mode, so that we can see exactly what you have on the Timeline. For directions on attaching screen-caps to the forum, see this article: http://forums.adobe.com/message/2643538#2643538
Also, what were the pixel x pixel sizes of the Still Images, that you used in Photoshop Elements?
Also, are you seeing this blurriness only in PrE, or when you Burn the DVD and play it in a DVD player, attached to a TV?
If in PrE, have you Rendered your Timeline, for smoothest playback? See this article for more detail on Rendering: http://forums.adobe.com/message/4068277#4068277
Also, a DVD is 720x480 so a larger picture will be reduced when the DVD is created... that is true for video, but I don't do slideshows, so am not sure if the same is true for a slideshow
The pixel x pixel sizes are pretty large, most seem to be 2000x2500 to 2500x3000.
The images are blurry on both PrE (just prior to and after transitions) Very clear when the image is just displayed, not in transition.
I did render the timeline, and it actually made them worse.
I had an older version of photoshop and premier and everything worked very smoothly then, but when the computer crashed and I got a new one, I had to upgrade to be able to run on the new computer, and just are not getting very good results yet.
Thanks for helping me on this.
If you are producing a slideshow for DVD, we always recommend you reduce all of your photos to no larger than 1000x750 pixels before you load them into Premiere Elements. This allows the program to work more efficiently -- and produces cleaner results.