Welcome to the forum.
However, you have posted to the No Response Needed sub-forum, that is designed for people to rant.
If you are asking for assistance, please let us know, and we can Move this post out to the main PrE Forum, where you will get help.
Please move to the main form. I converted the file to mpeg2 instead of original .mts file still no audio
[Moved to PrE Main Forum]
Lots of questions.
Is this a "it worked before but now" type issue or "it never worked before" type? The answer to this will direct a lot of the rest. AVCHD editing can be problematic since it is such a resource demanding format.
You mention Premiere Elements 7 on Windows XP SP2 (presumed 32 bit). What do the computer resources look like in terms of installed/available RAM and free hard drive space? No SP3?
Based on what I have read of your Canon Vixia HFM 31, you are working with either 1080i or 1080p (1920 x 1080 16:9 @ 29.97 interlaced frames per second/aka 60 field per second or 1920 x 1080 16:9 @ 30 progressive frames per second. Which one or other?
Your video appears to have AVCHD video compression, Dolby Digital 2 channel audio..you add .mts file extension. What is the file size and duration of the file that you are putting on the Timeline?
What have you set as the project preset for this Premiere Elements 7 project?
After import of the file, can you see audio content with wave form in Audio 1?
Let us start here and then decide the troubleshooting strategy.