Preview files are temporary renders of your timeline.
When your timeline needs to be rendered, you'll see a yellow-orange line along the ticker at the top of the timeline, above your clips. You can render the timeline by pressing Enter. The yellow-orange line will turn green and your playback will look smoother and cleaner.
Previews having nothing to do with the final output of your video. You can delete them and, worst case, you'll just need to recreate them by again pressing the Enter key.
Ok thank you. I am trying to organize my files by saving what I want to keep on an external hard drive and deleting what is not necessary. I want to make sure that I can open my projects later and make changes to them, but for now I am finished with edits to these videos and want to store them on the external hard drive to save space. I understand from your note above that I can delete the Adobe Premiere Elements Preview Files. What about the Encoded Files folder and the Layouts folder. I noticed that the Encoded Files folder only has a few of the projects, so I don't know how I inadvertently created them and what their purpose is. Ditto for the Layouts folder. Thanks