The project files for Premiere Elements have a file extension of .prel.
The basics are the workflow are
1. Create a new project file (prel file)
2. Import your source media into it
3. Edit the source media
4. Export the edited source media to a file save to the computer hard drive or burned to disc (DVD or Blu-ray).
Your useable files are the exports from the project file (prel).
Keep in mind that if you create two project files (two different projects), you cannot import one project file into another.
If you wanted to use something in project 1, then you would need to export the Timeline content from project 1 and then import
that export into project 2 for export to its final product.
What version of Premiere Elements are you using and on what computer operating system is it running?
Do you have the program or just thinking about using it?