Try this for crisper lines in a Premiere Elements 3.0 NTSC project:
If the pixel aspect ratio of the clip or still image is square (1.0), change it to 0.9 using the Interpret Footage command. Second, in the properties panel, uncheck the Constrain Proportions option in the Motion effect. Third, change the Scale Width to 111.1%
This came about because I thought I needed new glasses after I added a PSD document with 18 pt. and 8 pt. text to a Premiere Elements project. The document was 640x480. I also had some text that I captured from the screen that also looked blurred. I thought it may have something to do with the pixel aspect ratio, and I was right. Changing the pixel aspect ratio from 1.0 to 0.9 made the text look crisper, however the width was out of proportion. Next I calculated that I needed a width of 111.1 (100/.9) to put it back into proportion. The text stayed crispy even after widening it back into proportion. Comparing the before and after side by side, there is a subtle difference that is also noticeable on standard NTSC TV. It's most noticeable when you use Scale to Frame Size. The difference is not very noticeable if the document is large and you don't use Scale to Frame Size.
The other alternative is to increase the image width from 640 to 720 in Photoshop while keeping the height the same. Then in Premiere Elements make sure the pixel aspect ratio is set to 0.9 after adding the still to the media bin. If your document is other than 640 pixels wide, increase the width by 12.5% (640 x 1.125 = 720).
Using a similar technique on a PAL project I couldn't detect any differences, but I did find that changing the Scale Height from 100% to 101% fixed my vertical jagged line problem on images that were scaled to frame size.
I found that the technique can also be used in a 1080i project. But instead of interpretting the footage as 0.9, you use 1.3333, whatever the project setting is. Then in the Motion effect you change the Scale Width to 75% (100 / 1.3333) while leaving the Scale Height unchanged.
All this depends on the video or still having even dimensions. If you have a still that's 1000 x 751 and use Scale to Frame Size, then you can't use this technique. The odd vertical dimension causes a problem.