Is your Premiere Elements 10 on a computer that uses a NVIDIA video card? If so, please check out the following thread.
You may need to roll back the video card driver version instead of assuring that you have the latest version of the driver installed (the classical drill).
Is your issue "It worked before but not now" type or "It never worked before"?
Please review and let us know the outcome. And, please do not hesitate to ask if you need clarification on anything written here.
What model of camcorder is your MTS video coming from and what resolution is it?
What are your Project Settings (listed under the Edit menu)?
Have you ensured that you have the latest version of Quicktime, per the program's requirements?
Have you gone to the ATI or nVidia sites and ensured you have the latest drivers for your graphics card?
If this user has Premiere Elements 10 and a NVIDIA video card, the latest version of the NVIDIA video card driver would not be the way to go based on current history...for now, it would be roll back.