Have you played the DVD burnt to folder from PE7 with a software DVD player to confirm the menus are there. You can use the DVD player that comes with NERO.
How do you burn with NERO? You need to burn as a DVD-Video not a data file, I think this requires NERO Burning ROM the full version if I recall, not the reduced version given away with DVD burners. This will will burn the Video_TS folder containing the menus.
I've found out through trial and error that because in PE7, I've created the OPEN DVD folder and the VIDEO_TS folder, that all I had to do was treat it as a DATA file although Nero warns me that this will not create a video DVD; though in fact that's exactly what it does do. Problem solved.
There can be issues when burning the Video_TS folder (you can ignore the Open_DVD folder this is specific to Premiere Elements... well Sonic) as a data file... it may not play back on some DVD players. That is why NERO gives you the warning. If possible burn it as a DVD_Video.
Paul has given you some good info on getting the Project Burned to a Folder and then to disc. However, the problem with not being able to locate your burner(s) from within PE is most likely an issue with Nero and it's InCD packet-writing program. This module of Nero will "seize" control of your burner(s) and will not let any Adobe products have full control, which Adobe products need to do any Burn to disc. The same thing happens with Roxio's DLA module and even with Windows' packet-writing software, especially if you have Quicken and have ever used its Backup to CD function.
Packet-writing software allows one to see a writable DVD (or CD), as a virtual drive and perform drag-and-drop functions on it. These are often installed by default and really mess up anything Adobe. I highly recommend removing Nero (or Roxio, et al) and then doing a Custiom Install of just the modules that are necessary, omitting DLA, InCD, etc. One often has to do an uninstall and then a Registry cleaning to fully remove all traces of these packet-writing programs. Once clean, do a Custom Install, and choose exactly what you need, leaving out packet-writing modules and any indexing modules.