When you open Premiere Elements 4 and the Welcome Screen appears, click on "Capture Video". The Capture Window will appears. Look up to the top right of that Window (those tiny black arrows next to the X/close).
Clicking on those tiny black arrows results in a drop down list which should include the options:
Scene Detect by Timecode
Scene Detect by Content
I suspect that you are clicking on that camcorder icon just below those tiny black arrow.