As is evidenced by several posts on this forum over the past month, Premiere Elements can be kind of unpredictable on Windows 7 64 bit.
This isn't so much a fault of the program or the operating system as it is that the operating system is so new that its 64-bit drivers aren't completely compatible with 32-bit programs, like Premiere Elements. Strange behaviors are pretty common at this point.
Your best bet is to go to the RealTek site and ensure you have the latest audio drivers, go to the ATI or nVidia site and ensure you have the latest firmware for your video card and ensure you have the latest version of Quicktime. If anything can help, that will.
Your event error viewer shows 'nvSCPAPI.dll' as a problem. This is nvidia related.
Install the latest 64 bit nvidia drivers: http://www.nvidia.com/object/win7_winvista_64bit_195.62_whql.html and let us know if that changes the error details.
Insanity is hereditary, you get it from your children
I've mentioned it in my earlier posts also, but one cannot trust PE 7 on Win7. The main reason being that Windows 7 was not around when PE7 was released so there might be some unpredictable behaviors.
Your best bet would be to update your display and audio drivers. If it works, great and if its doesn't: I won't be surprised...