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Just curious... if it works one way, why try another way?
Because sometimes I want to use the same clip in several movies, so I want the clip to be accessible from the Library.
It works correctly on my machine, so what is wrong with your machine.
I have heard of the database becoming corrupted. You might want to rename the organizer database folder, after exiting out of all Adobe applications. Then when you start up PRE 7, a new database will be built. If the thumbnail in the Organizer is correct after you have captured, then probably the database was corrupted.
My organizer database folder is located in C:\Documents and Settings\All Users\Application Data\Adobe\Photoshop Elements\Catalogs\My Catalog
I can rename the folder "My Catalog" and a new "My Catalog" will be created the next time in PRE 7. You can actually switch between the new and old catalogs within PRE 7 under the File menu. Of course nothing will be in the new catalog.
I don't have Photoshop Elements, so I don't know how renaming the folder would affect what happens in Photoshop Elements.
You may end up having to contact Adobe support.
Looks like your Catalog is corrupted as Robert says here.
You can try the steps provided by Robert, this will work and it can be done even if you dont have PSE installed.