Thanks for posting on Adobe forums,
Please provide us information about the Codec used in AVI file.
use this software to get information about media : http://mediaarea.net/en/MediaInfo
What is the source of these files ?
try to transcode the media using : http://www.pcfreetime.com/
and Import in Premiere Elements 12.
please be adivised that there are many different kinds of "Avi files". there's the regular Avi (is that the same as Mpeg-4?),
and then there's "DV Avi" which Premeir Elements seems to prefer to work with and edit almost exclusively..
many times i have loaded the regular "Avi" format (Mpeg-4 ?) on to the timeline, and the error message says that Premier Elements does not recognize the format.
i have found that converting all of my video to the Premier Elements DV Avi format from the timeline, before i do any editing,
make everything work much more reliably. (in fact, i have found that converting to Premier Elements DV Avi 3 times, before editing, makes things work even more reliably than that, even. and, furthermore, it seems to me that each of these DV Avi conversions inhances the imagery rather than imposing degredation, like most other conversions do.)
As has been mentioned, .avi files are not all the same and can differ in the video compression and audio compression in the file. So, the first step is to define what kind of .avi you have in terms of video compression especially.
You can use the MediaInfo program to find that information and more as Sandeep has posted.
You could also look at the properties readout with the free utility named gspot
A quick more "inferred" way would be to name the brand/model/settings for the camera used to record the video.
In many of these types of ".avi" reports, the video compression of MotionJPEG is involved. So, that will be an easy one to spot and mention the classical remedies for that type of situation
a. use a utility from the camera to supply the needed codec
b. download the Morgan MotionJPEG Codec
c. convert the MotionJPEG.avi to another format that is appropriate and compatible with Premiere Elements.
There might be a possibility that you have AVCHD.avi which is not compatible with Premiere Elements as evidenced in recent threads.
Once we know the above, then we can suggest appropriate conversion methods if it comes to conversion methods.
Looking forward to your follow up.
As pointed out, there are many possible CODEC's, that can be contained in an AVI wrapper. For more detail, see this FAQ's article: http://forums.adobe.com/thread/440037?tstart=0
Knowing exactly what is inside the wrapper (AVI) is most important.