Premier Elements Video Degradation

Question

The Background.
For the past three years, I've been dabbling in video projects and have learned to become pretty good at it (if I do say so myself).  I own three Sony Handycams now (Model number DCR-DVD650) which record onto memory cards, not mini dvds.  I've gotten so good at the videos that they are now earning an impressive, part time salary for me.
Here's the basic problem:  I take the video using the HD setting (I want quality video, not quantity).  When I important the video from the camera to my computer, they are .mpgs.  I select the videos that I want and merely discard the 'wastes of time.'
When I attempt to add the 'raw video' (that's what I call them) to my Adobe Premier Elements project, a window pops up that says 'Unsupported Audio Rate in File.'  So, I use the Sony PMB Video program (which came with the Camera) to convert the videos to .WMVs.  Then, Adobe will happily accept them.
By the time I am done with the project, I render the video project to a .WMV and then post it on Youtube, Facebook, etc. 
The Challenge
When I begin the project (at the point of the videos within the camera), I could not be happier with my work.  By the time the videos make it through two conversions, a rendering and a YouTube filter, they lose 50% of their quality.  So eventhough the video project is completed to my satisfaction, I often receive comments like, 'David, GREAT video!  But when I maximize the video on YouTube/Facebook, it gets really grainy.'  Other people comment - 'You make GREAT videos.  Too bad you don't have a good enough camera.'
The Question.
How do I get the 'raw' video from the camera to the Premier Elements project without losing quality?  I really want to take the crisp, vivid from inside the camera and insert it into the Premier Elements project as it is.  What can I do to make this happen?  Is there another software system I can purchase?  Perhaps a trick from the backend of the video?
The Disclaimer.
Although I have vast experience taking video and my editing skills are worthy of bragging about, I probably do not have 1% of the techincal jargon embedded in my brain.  Simple solutions, please. 

Answer 1

Thanks to the both of you for your assistance.  I won't like and pretend to understand everything that you are mentioning.  I certainly have no ego to bruise in this department.  I am the founder of a very large organization that began helping businesses in an attempt to get customers.
Version of Pre Elements
Two years ago, I purchased Pre Elements 1.0 off of Ebay for $25.00 and began learning the basics.  Now, two years later, I have version 4.0 and recently purchased 7.0.  I haven't downloaded 7.0 yet.  There's so much to learn!
So now, local businesses are willing to pay me to continue making more videos for their businesses.  Now, my value is beginning to outweigh my knowledge.  Time to really learn this stuff (video making).
Barb O., by 'what type of project', what do you mean by that? I've reviewed the preferences section and I can't ascertain how the project is 'identified.'
Anyway, as I mentioned before, the videos (right out of the camera) are beautiful - crisp and clear. If I can learn how to take the 'raw' video and merely convert it so I can use it on Pre Elements, I can render the final product as a Mpeg and go from there.
Like I said earlier in this thread, everyone loves my videos but merely wishes that the end result was much 'crisper.'
Is there maybe another video making software system that is more 'forgiving' in terms of accepting raw video from the cameras?
And I want to say again.....thank you for your comments, assistance and advice.
David