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How much free, defragmented space do you have on your HDD?
Is your video driver the very latest?
Is your QT Player the latest version?
For a computer with marginal power, this ARTICLE on setting it up for an editing session might be useful.
I have 398GB of free space, and my graphics driver is up to date, and so is QT. I have also followed the steps in the article and yet, I still have the issue.
768MB Ram is woefully inadequate for PRE8, I'm surprised you ever got it to work at all, especially with only a Pentium 4 processor.
It sounds like you have already tried the essentials, but you could work through this note as well: Troubleshoot damaged projects (Adobe Premiere Elements 8)
Insanity is hereditary, you get it from your children
Very good point, Neale! I sure wouldn't run this program with less than 4 gigs of RAM!
You're also trying to run it on a Pentium, which is also a bit below spec for this program. In my book, I recommend at least a 2.6 ghz dual-core processor for editing basic DV -- and a quad core or i7 processor for editing hi-def and AVCHD. So, even if you get the program up and running, you may find it performing frustratingly slowly.