Premiere elements 10 timeline dragging problem

Hi .. I have installed Premiere Elements 10.0 Trial version and am seeing a problem with the user interface when I drag a clip within the timeline.
The screen-image from the top part of the user-interface becomes the background of the timeline section when a clip is dragged within the timeline - see attached images (before dragging, and during dragging).
I saw there was a Java runtime issue for Lion, so I have now installed this - didn't fix the issue (unless I have to reinstall PRE after I've installed the runtime).
I am running the following system:
MacBook Pro 13-inch, Early 2011
Processor 2.3 GHz Intel Core i5
Memory 4 GB 1333 MHz DDR3
Graphics Intel HD Graphics 3000 384 MB
Software Mac OS X Lion 10.7.2 (11C74)
Any thoughts welcomed, thanks,
Adam
[UPDATE] I see this is a known issue.
Message was edited by: phibot

Thanks for the feedback Steve ..
In the screen-grabs above, the video clip was from an old VHS imported to iMovie (using a canopus ADVC-55). I'm sure you are right - the settings wouldn't have been matching .. although I didn't keep the project so I can't check (it was a jpeg still on video 1).
Ihave now tried again - with project settings matching the video clip file (DV PAL 25 fps 720 x 576), no jpegs, and the red lines are gone .. but the problem is still there when I drag a clip within the timeline (even if there's just one clip in the project). As mentioned in my edit, I see there is a known issue with Mac OS X Lion and PRE in the Timeline .. link here, although that says there are colour artifacts in the Timeline where I'm seeing the screen-image from above duplicated as the background, but I'm sure it's the same bug.
.. thanks again - helpful stuff I didn't know.

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Date: Sun, 23 Mar 2014 06:31:03 -0700
From: [email protected]
To: [email protected]
Subject: Premiere Elements 12 output problem
    Re: Premiere Elements 12 output problem
    created by Steve Grisetti in Premiere Elements - View the full discussion
A lot depends on a lot.
What operating system are you using? What processor do you have and how much RAM and how much free space is on your hard drive?
How long is your project? What model of camcorder is your video coming from and what format and resolution is it?
Have you ensured that your project file is saved to its own folder, with no other project files in this folder?
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If you are on a Windows computer, have you set up your computer to get both Windows and Microsoft Updates -- and have you manually gone to Windows Update and ensured you have even the optional updates that don't install automatically?
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