Starting Photoshop Elements 2.0

When I try to start the program for the first time - just installed it - I get the error message "Could not initialize Photoshop Elements because the scratch disks are full".  The error is a fatal one - big cross on the left had side - program closes when you press OK

Thought anyone else might want to know my final resolution.
I loaded VMPlayer on my new Win 7 box; loaded Win XP as Guest with 40GB disk/2GB RAM. Loaded PSE 2.0. Set Unity mode. Shared My Documents from Host.
It now works with a reasonable level of integration.
Had to do the same with FrontPage 2000 - run in the same XP VMPlayer - since it is incompatible with Office 2010.
I suppose I will have to plan to upgrade these apps. But at least I can do it at leisure now.

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