Having been an adobe premiere user for ages in various versions, when I brought a new laptop recently I decided to go for Elements 9, for familiarity. Upon installation there was no playback or frozen picture in the preview window making it useless. I tried everything I could think of. Then called the Adobe helpline, and spoke to a very pleasant but ultimately useless man, who did not solve the issue, booked a return call, that did not happen, and pointed me in the direction of the forums. It was here that I discovered loads of other people having a similar issue. There is a Bad Drivers file "fix" that is mentioned widely - however in my case however I got rid of it - upon opening the program it was put back again! No fix. I also made sure that the Nvidia driver was the latest. No fix. Drove 270 mile each way to Birmingham where Adobe were exhibiting (Focus 2011) spoke to an "expert" who knew less than me! Waste of time.
Since then I have loaded Magix HD Video Editor, which actually has quite a bit of similarity to Prem Elements with one big exception. It works, with no hassel. Out of the box - easy.... with the help of a professional editor, and a software designer, and three hours on the laptop, I now have premiere elements working too, with no help from Adobe!
SO... in conclusion, I would strongly recommend that unless you are a computer expert with experience in video editing AVOID PREMIERE ELEMENTS - go for MAGIX. This will be what I recomend to people when I do talks around the clubs and things where I go. Such level of knowledge to get a "lite" program working, especially for someone lacking in knowledge, in version 9 for goodness sake is simply awful.... If you really must, download a trial before you buy!!!
Good luck to all and happy film making!!
Not sure if you have seen Neale's suggestion, regarding the BadDriver.txt file, but he recommended setting the file's attribute to ReadOnly, once it has been setup properly.
OTOH, if you are happy with Magix, I can understand wanting to stay with it, and ignoring PrE, which seems to be giving you troubles. Many users have found that they liked Magix, CyberLink or Sony Vegas better.