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Yes this happens with PE4 and PE7... it is annoying. Robert J. Johnston offers a solution and it is to "encapsulate" Premiere Elements using Windows Sniper. http://www.unhuman.com.
I used to have this problem, too, especially with PE4. To make matters worse, when I'd click play, it would restart but the video wouldn't play (i.e. audio only). I'd have to click Stop/Start a random number of times to get it to start replaying correctly.
I tried a bunch of tweaks, but what worked for me was to simply bring up Task Manger, and bump the priority of the Premiere task to one below "Realtime". I have to do this each time I start Premiere, but it's worth it to not have any problems.
I've tried changing the priorty higher, but in the end, playback stops. I can go 2 or 3 hours playback without stopping, but it stops. The only thing I've found is Windows Sniper. What's more, playback won't stop even if you switch to another application.