Which format is the original?
Better yet. Please post a screendump of the properties of a clip used.
Which OS and PE version?
The .prel file is the Premiere Elements project file. It's not the actual media or video.
As Ann will no doubt explain, when you're done editing your video, you'll output the finished, edited video in whatever format you'd like using the Export & Share tools.
My computer is on windows7
I use a SONYcamera and the video files are in .MTS extension.
effectively, when I modifie my video sequence I use record or record on and is this case I have only the .prel extension but if I use export it's OK.