If you've converted your Flip video, using the specs in the FAQ, you'll have a DV-AVI. (Remember that, if you're in Europe, you should be using the PAL rather than NTSC DV output codec.)
Make sure your Premiere Elements project is using the standard DV preset and the video should not show a red line above it when you place it on your timeline.
Thank you Steve!
However, I tried as you said the two settings that you will see in settings.jpg and still got that redbar (as you will see in redbar.jpg). I did not use the PAL settings since I'm in Canada.
You will see in prism.jpg that I think I used the right options to convert my .mp4 in .avi.
I think I'm going to get really desesperate.
It certainly does appear you've done everything you're supposed to.
I'm sorry that I don't have a solution. Maybe another Flip person can offer some help.
Thank you Steve for all your answer!
Please check my response to your issue that you post at another forum that I frequent.
From the screenshots that you posted there, it would appear that you used Prism to convert your flip video using the Xvid MPEG-4 codec, not the DV Codec.
Please correct me if I am wrong.
(Steve Grisetti, please see my recent thread in this forum regarding "where as the aspect ratio settings?" in Prism.