First, have you ensured all of your photos are sized to no larger than 1000x750 pixels, per the FAQs to the right of this forum?
What model of camcorder did your video come from and how did you get it into your computer? When you started your Premiere Elements project, did you ensure that the project settings matched your video specs? If they do, you will NOT see red lines above the video clips you add to your timeline until you add effects to them.
Finally, when you do see red lines above the clips on your timeline, did you press Enter to render the video timeline? When those red lines turn green, your performance will improve and you should not have any memory error issues.
The video was shot on my Canon Powershot camera. Pictures were taken with several different ones. No, there are not red lines. I render often and I rendered the entire project so it was all green, then saved it. Then exited Adobe, shut off all possible services and then tried it. It plays perfectly from within Premiere Elements. I never had this problem with version 3. This is a new problem with version 9. I did not look at the size of the photos, but I'll check that too.
Also, check on the amout of defragmented, free-space on your C:\, and also your destination HDD.
While this ARTICLE covers program crashes and hangs, after the initial checklist, there are several links, and some address memory and resources. Maybe something in there? You have already addressed some of those suggestions, with the unnecessary processes, and also the Page File, but there might be something that was missed.
Could you please share project file (prel) file. We will try this at our end and see what is wrong with the DVD share.