Display driver & Baddriver http://forums.adobe.com/thread/1370916?tstart=0
For Windows, do NOT rely on Windows Update to have current driver information
-you need to go direct to the vendor web site and check updates for yourself
ATI Driver Autodetect http://support.amd.com/en-us/download/auto-detect-tool
nVidia Driver Downloads http://www.nvidia.com/Download/index.aspx?lang=en-us
IF you have dual graphics adapters read below, otherwise ignore this part
-link to why http://forums.adobe.com/message/4685328
You have left out an important piece of information, starting with
What version of Premiere Elements are you using? It appears to be on Windows 7? Can we assume that is Windows 7 64 bit?
The next step is to delete the BadDrivers.txt file and see if that corrects the problem. I am at a disadvantage not knowing your Premiere Elements version and the full details of your computer operating system, so I will give you the Premiere Elements 12 Windows 7 64 bit details.
If you have Premiere Elements 12 on Windows 7 64 bit, the path to the BadDrivers.txt file is
Local Disk C
and in the Premiere Elements Folder is the BadDrivers.txt file. This BadDrivers.txt file is a file in the Premiere Elements Folder which also contain folders. You do not want anything in those folders in the Premiere Elements Folder. You want the BadDrivers.txt file in the Premiere Elements Folder.
After you re-open Premiere Elements, the program will generate a new BadDrivers.txt file and hopefully the display card error message will gone.
Be sure to be working with Folder Option Show Hidden Files, Folders, and Drives active so that you can see the complete path.
The rationale behind deletion of the BadDrivers.txt file can be found in post 10 of this older thread.
Let us start here and then decide what next based on your reply.