What version of Premiere Elements, what computer operating system? For now, I am assuming that you are in a PAL setup...
What are you recording - 1920 x 1080i25 or something else?
If interlaced video, have you explored
a. Using one of the Hard Drive Flash Memory Camcorder project presets for the automatic reverse field dominance
b. Used PAL AVCHD Full HD1080i25 project preset and applied Field Option Reverse Field Dominance to the Timeline video clip?
If you export the Timeline content to 1080p, is the playback of the export good?
Please consider and supply more information.