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Maybe you're confusing the Monitor with the Clip Monitor.
To open the Clip Monitor, double-click on a clip on the timeline or in the project media panel. (This won't work in Sceneline view. Switch to Timeline.)
As Steve says, there are two "Monitors." In Pro, they are named "Monitor," for viewing the Timeline, and "Source Monitor," for viewing the selected Asset (the dbl-clicking). The Tabs on each monitor have the names. I would assume that it is the same in PE7. Don't have it, so I cannot check this.
In Pro, I keep the Source Monitor on my main monitor, nested with the Effects Control and Audio Mixer Panels. My main Monitor is nearly full-screen on my left monitor and cascaded with Titler and the Project Panel, all free-floating. Dbl-clicking on an Asset brings the Source Monitor into focus above my Timeline.
So many uses of the word "monitor" can become a bit confusing - that's why I keep the two on separate screens, so I don't have to look at the fine type in each one's Tab. Check to see if PE7 also calls them slightly different names - up in the Tab for each. I wish that Adobe would actually change the color of the text in the Tabs, or similar, just to keep the confusion down.
One last note: if you have focus on the Source Monitor and hit Play (Spacebar), what plays is the source Clip, not the Timeline. You have to toggle focus to either the Timeline, or to the program Monitor. I'm always adjusting the Audio Volume and then hitting Play, only to wonder where my changes went. Well, if I was in the Monitor, rather than the Source Monitor, I could easily hear them! Change focus, and hit Play again - all is right. Catches me once per day.
When you were in Premiere Elements 2 Edit Mode, you were dealing with a Monitor which consisted with a Clip and Timeline sections. That was your staging area for trimming clips.
That type of setup for trimming the clips is replaced in Premiere Elements 7 (as it was in Premiere Elements 4):
a. Basically, the Edit Mode Monitor is Monitor displaying the Timeline. The trimming is done in what is called by Adobe "Preview Window". In Edit Mode/Project View you can bring up this Preview Window by double clicking the media file there. Or, you could double click the media file on the Timeline. You use the In/Out points of the Preview Window to trim your clip there which you can then:
a. just drag trimmed clip to the Timeline
b. create subclip for saving as media in the project by dragging the image in the Preview Window from there to a blank area in the Project View Panel, filling in the subclip dialog box, hitting OK
then dragging trimmed clip to the Timeline
If you're in Sceneline mode, by the way, you will still see the selected clip's timeline at the bottom of the Monitor, if you want to trim that way.
My apologizes are in order, I think. I read your question as being based on confusion with dealing the Premiere Elements 2/4 interfaces. After re-reading your question and reflecting my response....I now think that I know what you are really asking....
Namely, in Premiere Elements 2, you can open a project, Get Media into your Media Panel, and move your file to the Clip section of the Monitor for trimming WITHOUT your original media being placed on the Timeline.
In contrast, in Premiere Elements 7, not so. Double clicking the media to get to the Preview Window (for trimming) results from:
a. double clicking the file in the Edit Mode Project View (but by that time it is on the Timeline)
b. double clicking the file on the Timeline.
I have not found an answer to get a Premiere Elements 7 sequence for this that is comparable to the Premiere Elements 2 one.
Since SG has written the book on tools in Premiere Elements 7, he should have the last word on what can and cannot be done. I do not believe that there is any reset, but...........
Hope that I have not goofed on my second try at this topic.
Edit...."...dealing with Premiere Elements 2/4 interfaces." should be "...dealing with Premiere Elements 2/7 interfaces."
Thanks, everyone. This has helped me learn the program.
Different from PE2 in small ways . .
The video tours at http://muvipix.com are great to take a look at. They show how things have changed as well as what's new. There are also some very good free tutorials to help you get caught up :)