Still cameras like yours produce a low-end video that generally uses the MJPEG codec -- a codec incompatible with Premiere Elements.
Is this video in the MOV, MP4 or AVI format? It's possible you can convert it to an editable format.
It's also possible that, if you shot your video in VGA mode, you can use the project settings for a Hard Drive Camcorder/640x480.
If this project setting doesn't work then your cam is saving its video in the MJPEG codec and you will need to convert it before you will be able to edit it in Premiere Elements.