Welcome to the forum.
Sounds like you have done a lot of things correctly already.
When I begin an editing session, I rely on the tips in this ARTICLE. With Win7, be sure to see the link down-thread to Black Viper's Win7 tune up page.
In PRE9 when you drag drop the first clip "Mismatched Settings" dialog pop ups in case the project settings doesnot match up with the clip you just dragged. Not cancelling this dialog can be a way of ensuring that you have chosen the right settings for your project. You can also try importing the clips and playing them by double clicking their thumbnail "Media" panel on right and check if that also crashes.
According to your camcorder's specs, your camcorder is not AVCHD Lite but full-blown AVCHD.
You should be using the AVCHD 1440x1080 stereo project preset and then downloading the video from the camcorder to your project over a USB cable using Premiere Elements' Video Importer. (Your video should not generate a Mismatched Settings warning and, when you place it on your timeline, it should not have a red line above it until you add effects or transitions to it. Is this the case?)
You'll need lots of computer power and LOTS of hard drive space to work with this video.
AVCHD usually requires a quad core or better processor, 4 gigs of RAM. You may be able to work with this video on your computer, if your project is set up properly (as detailed above), but it will likely work very slowly. You'll also need 50 or more gigabytes of free space, freshly defragmented?
The program needs this free space in order to create scratch, paging and temp files. This space must also be defragmented, because the program needs this space in contiguous chunks.
I appreciate all the suggestions, but I am still having no success.
PRE9 gave me error messages when I tried to load the clips into a project with Full AVCHD, so I actually changed to Flip Mino HD and Ultra HD 29.97. No problems bringing in the clips, but still having the same crash issues I had when using the AVCHD Lite.
I even went back and imported the clips straight from the camera using PRE9 instead of moving them over manually.
It now consistently crashes when just editing titles.
I noticed in the EventViewer that all crashes logged an error like the following:
Faulting application name: Adobe Premiere Elements.exe, version: 220.127.116.11, time stamp: 0x4c86effb
Faulting module name: xerces-c_3_0.dll, version: 18.104.22.168, time stamp: 0x4936a5bb
Exception code: 0xc0000005
Fault offset: 0x00008277
Faulting process id: 0x10d0
Faulting application start time: 0x01cb6cd47fd55438
Faulting application path: C:\Program Files (x86)\Adobe\Adobe Premiere Elements 9\Adobe Premiere Elements.exe
Faulting module path: C:\Program Files (x86)\Adobe\Adobe Premiere Elements 9\xerces-c_3_0.dll
Report Id: d4c4453a-d8c7-11df-a842-70f39597bc7c
The xerces-c_3.0.dll module seems to somehow be central to every crash.
Any additional ideas?
Thanks for the help!
Which title template are you using? I am using title template in my project and it works fine. It could be a title template specific issue. You can try using a different template and check if that works.