When I open Record Voice Narration window the "record", "play", "go to previous naration" ,etc. elrments are not lit. The "delete' and "mute audio while recording" are lit as is the "microphone source". the volume and input volume slider are not lit. When I click on "microphone source" nothing happens either with only the computer mic available or even after connecting the external mic. When I do "Sound Recording" on my computer without APE it does record.
Windows 7 OS, laptop, In computer mic and external mic. I've not used these on this computer before. I'm not familiar with the various settings available.
Is your microphone input properly set up in Windows?
Is it also properly set up in Premiere Elements' Edit/Preferences/Audio Hardware/ASIO?
Does the microphone show as set up when you click on the microphone icon in the upper right of the Narration panel?