Nobody can tell you anything without proper system info or other technical details. Start by reinstalling the program.
Lots of questions and answers need to be put together to customize troubleshooting for you.
1. How has Premiere Elements 7 stopped working for you?
a. Where does the failure occur - import, editing, export or just trying to open the program by double clicking the program's desktop icon?
b. Can you open new or old projects?
c. Does the projects open, but then crashes doing editing?
d. Are you getting a generic error import message when you import your video"?
From what you mention about defective files, this may have nothing to do with Premiere Elements 7 performance, but
have more to do with your source media files.
But the answers will be in the details. Looking forward to your follow up.
Based on that we can decide what next.