>not sure what codec
Knowing that is KEY to video editing
Read Bill Hunt on a file type as WRAPPER http://forums.adobe.com/thread/440037
What is a CODEC... a Primer http://forums.adobe.com/thread/546811
What CODEC is INSIDE that file? http://forums.adobe.com/thread/440037
Report back with the codec details of your file, use the programs below... a screen shot works well to SHOW people what you are doing
For Mac http://mediainfo.massanti.com/
It also helps to know what model of camcorder or camera this video comes from.
Premiere Elements does indeed edit some types of 720p!
When you set up your project, you should have selected the AVCHD Lite 720p30 project preset.
That will give you the best performance possible with this clip. If your system is well-tuned, you should probably have the power to do at least some basic editing with it.