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Much has to do with the video and audio codecs of the clip.
What type of camcorder did this video come from and how did you get it into your computer?
The video is actually a screencast (recorded with CamStudio 2.00) and saved as a .AVI file compressed with the ffdshow codec. What type of codec would you recommend? My Premiere Elements 7 runs on a PC, if that is any help...
Since CamStudio is open source software, there's not much documentation online so I can't tell what codec their AVIs use. (If you want to know, you can open the AVI in Windows Media Player, go to the File menu and select Properties.)
But converting it from whatever it is to a DV-AVI before you bring it into Premiere Elements will likely solve your out of sync problems. I'm not sure which program will convert it, but you can try Prism.