Premiere Elements 10 Error on load - "we have detected an incompatible display driver"

Greetings! I was happily using this software for several weeks without problems when one day for no apparent reason (no new hardware or significant software changes) I now get this error constantly when trying to run the software - "we have detected an incompatible display driver. to get better and faster playback performance, please update your display driver. display driver details : intel - intel bear lake B 1.4.0 - Build 7.15.10.5218"
I then updated the intel graphics drivers to the latest version but to no avail. I have tried four different driver versions from oldest to newest and still no success. I have un-installed the software, drivers, started from fresh with all imaginable combinations, CCleaner-ed the hard drive, virus scanned, defragmented, updated windows, etc. I am now at a loss for what to do next, beyond insisting for a refund and going to another software company for my video editing needs.
My machine is a 2Ghz Dual-Core, 4GB RAM, 80GB available HDD space, running windows XP pro SP3, updated everything drivers and OS.
I find this problem even more confusing given the fact that is was working, then decided not to work any more. Perhaps something updated in the background without my knowledge?
Any help would be greatly appreciated.
PS - I have tried all the things on this list relating to Premiere Elements version 9, but none have helped - http://kb2.adobe.com/cps/875/cpsid_87588.html

If none of the troubleshooting for the display adaptor (graphics card driver update, BadDrivres.txt etc.) do not work, we have to understand that the display could actually not be supported. By display, I mean the card-driver-driver version combination. So,
1. It could be a bad card - None of the available drivers work for the application. Here, ditch the card and get a newer one that works.
2. It could be a bad driver - For e.g. Only DirectX drivers work, OpenGL ones could be pathetic (Many games detect this and if this is bad, I have seen Photoshop struggle with this). Or some display configurations would be badly supported (multiple monitors, some funny resolutions, some of the ports, crossfire etc.). Older drivers/cards/some OEM drivers etc. have these issues in my experience.
3. It could be a bad driver version - Here upgrade or a downgrade works.
Because of a Video editor, the (lack of) capabilities of the card is highlighted. Video Playback alone doesn't nearly exercise the capabilities the cards usually have to offer. Editing really does. That is why it matters if the Video Editor actually says that it supports Graphics acceleration (Or GPU acceleration) for any of the workflows.
What I am saying here is that when we blame the application for any of the issues, we have to be certain that the issues are NOT due to one of the mentioned three causes. I have seen this all too often in the gaming forums, Nero forums (some years back), in PPro forum, and here. If the application menufacturer is really to blame, the mistake would be all too obvious and too many of us would have complained about it. I do not think this is the case with Premiere Elements 10.
Introspection works.

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