This appears to be an AVCHD camcorder, so that's the project preset to use.
But, as you probably know if you've been following these forums, the biggest liability to AVCHD is that it takes a very hefty computer to work with it. Usually a quad core processor with at least 4 gigabytes of RAM and many gigabytes of hard drive space.
So I'd recommend test driving it before I invested too much time into trying to edit a major project in Premiere Elements.
Well, it offers HD in AVCHD w/ DD (stereo) AC3. I'd choose the appropriate Frame Size for your needs.
For a Project Preset, you should go with that Frame Size and the AVCHD Preset. The Audio should not be an issue, as you do not have DD 5.1 SS to deal with.
Note that one needs a very robust computer to edit AVCHD fluidly. Many recommend a Core2 Quad as the absolute minimum w/ at least 4 GB of RAM. Others suggest that dual Quads are about as low as they'd go, and recs (64-bit OS) run up to about 12 GB RAM. I'd also make sure that I had a good I/O sub-system, i.e. HDD's with a minimum of 3x SATA II's internally. AVCHD, unlike other CODEC's is more CPU-intensive, than I/O-intensive, but I feel that a 3x SATA II is the absolute min. for editing Video. A 5x SATA II setup would be better yet.
Good luck. Seems to be a great camera with really good specs.