For VIDEO editing it is best to use a VIDEO camera. Not a photo camera.
Ahh so Premiere will only work with Video Camera's.
I guess built in camera's dont work, but whatever.
Now I just need to find a good video camera.
"Ahh so Premiere will only work with Video Camera's."
Well, not 100% correct, though it DOES like DV-AVI Type II video files the best.
The workaround is to do a conversion of your footage, outside of PrPro to DV-AVI Type II. This will introduce one more operation into your workflow, but benefit you. Many of the problems that you are seeing will likely disappear. Now, you will still have to live with the quality from the still camera, as it is likely not to be as good as that from a miniDV video camera.
I tried to find a recent thread that discussed exactly what you are seeing. Unfortunately, I cannot locate it. I do not know if it was in one of the PrPro fora, the PrElements forum, or maybe on another site. If I can locate it, I'll link to it. The aspect that caught my attention was that only the first frame shows in the video - just like you are experiencing.
PS there are many good conversion programs and some are freeware. I'd urge you to try some of these - remember you want DV-AVI Type II files, until you get that video camera.
[Edit] Still have not found the article, but here is a link to some data on file Conversion.