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You certainly can NOT open Pro projects in Premiere Elements -- or vice versa.
However, they should both capture video to the same format, so the captured video can be used in either program. You just can't start editing in one program and finish in the other.
Unfortunately, my tests between PrP and PrE were for earlier version:
PrP2 & PrE4.
What I found was that PrP2 could Open PrE4 Projects, with only a few glitches. PrE4 yielded an error, "This Project was Done in PrP2. Use That Program to Open This File."
These were simple Projects, with only a few Titles, Transitions and very limited Effects. There were no Themes, etc. used.
In PrP2, there were a few things that did not translate from PrE4. One Tilte had animation and text on a Path. These did not come in.
The PrP2 Project was even less involved, but nothing would Import.
As Steve says, the Assets will translate well between the two NLE's, but editing work will possibly be limited in one direction, but nothing will Import in the other.
Pro CS4 can open PE7 files but not the other way.
Thanks. As I have neither CS4, nor PE7, I was not able to test this.
Did you encounter anything that did not translate to CS4?
I dont have CS4 (I have an older version, never upgraded) but a colleague does. When I tried to open one project in CS4 there was an issue with an effect that did not translate. I can not remember the details now. Maybe it was due to one of my effect plug-ins which he did not have in CS4. Next time I see him I will take a more detailed look.