Are you saying that the program won't even launch into a blank project?
If so, try holding down the Ctrl+Alt+Shift keys on the left side of your keyboard as you launch the program to clear the preferences.
If that doesn't work, you may need to uninstall the program, then run a registry cleaner like CCleaner and reinstall. Something has gotten corrupted.
As for the process of converting old VHS tapes and working with photos, there are important considerations, once you do get things working. For one thing, make sure that the device you're using to capture your VHS is designed to create standard DV-AVI files. Most devices are designed to work only with the software that comes with the device and can cause problems for Premiere Elements.
On Muvipix.com, we always recommend the Grass Valley/Canopus AVDC. It may cost a couple bucks more than what you're now using, but ultimately it can save you many hours of headaches and frustration.
Also, as I say in my "Muvipix Guide" books (available on Amazon) make sure that your photos are are sized to no larger than 1000x750 pixels (72 ppi) before you load them into a Premiere Elements video project. Larger photos can choke and corrupt a project. Especially if you're using a large number of them.
BTW, it is possible that Quicktime is conflicing with XP, which is a very old operating system. Do ensure that you're installing the 32-bit version of Quicktime and not the 64-bit, which your computer is not capable of running.
Thanks Steve. I'll follow up on your approach and will let you know.