I **think** the files you get from that camera are Motion JPEG (AVI is a wrapper, not a codec... see below for more information)
If you do have MJPEG, read http://forums.adobe.com/thread/730396
To find out what you have inside your AVI file wrapper, click below
Codec & Format information, with 2 links inside to read
-read both links in reply #1 http://forums.adobe.com/thread/1270588
Report back with the codec details of your file, use the programs below... A screen shot works well to SHOW people what you are doing
If you are using the Canon S5is to record your video, then you have MotionJPEG.avi (the audio is described as Wav Stereo). If you selected the higher of the settings, the video is characterized by 640 x 480 square pixels - probably 30 progressive frames per second.
If the Canon does not come with a utility to supply codecs, then I would either (assuming NTSC setup)
a. convert the video from MotionJPEG.avi to DV AVI 4:3 with the free Prism converter
and then import the DV AVI into Premiere Elements with the NTSC DV Standard project preset. If the program does not set that for you correctly, then set the project preset yourself with File Menu/New/Project with a check mark next to "Force Selected Project Setting on this Project". And, then import the DV AVI into the project with the program's Add Media/Files and Folders.
b. download, install, and consider purchasing the Morgan MotionJPEG video codec after the tryout
We will be watching for your progress.