Don't upgrade to Windows 7. Do clean install.
I have similar problem. I suspect it has to do with the video card driver issue. My mahcine is a ThinkPad X300 running Win 7 64-bit. Ironic though that Premiere Elements 8 doesn't have the problem and can display the video fine in both the Source and the Program monitor.
Hi there, i had the same problem when i did a clean install of windows 7 and re-installed Premiere Pro, where i had the same problem you speak of. I uninstalled and re-installed it and it works fine now. Something to do with either the version 4.2 or the third party material. I would suggest going back to version 4.0 and that should solve your problems
Make sure you update Premiere and all Adobe apps to the latest version by going to the Help>Updates.
The graphics card driver would be the likeliest suspect. Go to the nvidia or ATI website and grab the latest for your system. I would guess that this will address your issues.
I finally uninstalled and reinstalled and, for the time being I'm going to stick with version 4.0 which works OK. Pr still crashes at random times but that's been normal from the git-go. Had the same problem with Elements, too. Too bad I had to spend so much time with this when I could have been either shooting or editing.
Thanks everyone for your help.
In my opinion, living with crashes is not acceptable. I'd like to help you.
Win 7 makes backups with ease so if you have a drive you can make a restore point/back up to, please do it and then update to 4.2 again. It makes a world of difference in overall stability.