You're using a pretty old version of the program, so there could be any number of factors at work here.
What operating system are you running? Which processor do you have and with how much RAM? How much free, clean, defragmented space is on your hard drive?
Have you ensured you have Quicktime 7 installed on your computer, per the program's requirements?
What model of camcorder is your video coming from and what format and resolution is it?
What are your Premiere Elements Project Settings, as displayed under the program's Edit menu?
If you download the free trial of version 14, does version 14 have the same problem with the same footage?