I have a project that I originally created in PE7, however when I moved it to PE8, it does not play smooth. Most of the problem seems to be when it reaches a transition. While I have added some effects such as zooms and pans, most of the trouble seems to relate to the cross dissolves. It stretches out the video or photo clip to the right and then about half way through the clip it snaps back to the correct position. Can there be a compatibility problem bringing PE7 projects into PE8?
Generally, it's not a good idea to open a previous version's project with a newer version of the program.
Ideally, the program SHOULD be backward compatible -- but it usually isn't. Not without problems like you're experiencing.
We always recommend finishing your work in one version before you start a new project in a new version. Or, at the very least, do a Save As as soon as you open an older project and save a copy so that you can always go back to your original in an older version of the software if problems occur.
You could try rendering the video on the timeline in Elements 8 after importing from Elements 7 (Press Enter on the timeline)
You could also try "Project Archiver" feature in PrE 7. That copies the content from PrE 7 and stores in the HDD. You can open the project in PrE 8 from this archived location and then try again (You might still need to render the videos..)
Specifically these transitions do not have any forum-reported issues as far as I have seen..