Further what Neale says, if those AVIs are HD they're likely in a format Premiere Elements can't handle.
What model of camcorder is it? We may be able to recommend something.
The AVI file does play back in PE7.
I did not however understand the information at either of the sites referred to in the first answer. Am I to understand from the term wrapper that a variery of formats could be contained in a specific wrapper? If so, as AVI, prior to the general adoption of domestic HD formats, was the standard wrapper for SD video footage, why hasn't this continued as wrapper of choice for 1080 or 720 HD files?
After you have downloaded and installed GSpot or MediaInfo load your clip into it and post a screen capture here. Then we'll be able to help you out once we know what we're dealing with.
Insanity is hereditary, you get it from your children
The main reason hi-def footage is not in the DV-AVI format is that, since hi-def includes over four times the number of pixels, the video files would be huge! Like over a gigabyte per minute.
So, in the case of hi-def, MPEGs make more sense.
But if you're working with a hi-def AVI that's not 1 gig per minute, then it's using a codec other than DV -- which means that it's very likely going to cause an issue at some point with Premiere Elements.
As I say, before you commit too much time into a project, do a test clip -- all the way from importing to outputting as a DVD or whatever -- just to make sure your video really works as expected. You don't want to put hours into a project and then find out that the video Premiere Elements outputs is missing audio, out of sync or is too jittery to watch!
As an example of what Steve is saying, one can have HD footage, compressed and encoded with DivX and put it into an AVI wrapper. That file will very likely not edit in PrE.