Why does PE not find AVI codec?

I have just installed the trial of Premiere Elements, hoping that it will be more accurate and powerful than the free video editor I currently use. To my dismay it cannot display the avi video recording (screen capture) that my free editor has no problem with, it plays sound only.
I've read about the chewing gum and am completely gunged up with it. I must have the right codecs installed because my current video editor has no problem and I can play the files in any number of media players.
Do I have to convert every avi file before asking PE to handle it? I "work" against the clock, all I want is an effective cutter and joiner with fade transitions.

scyllabub
Thanks for the follow up. Your screenshot was very help and describes what you have as:
AVCHD (MPEG4 AVC/H.264) video compression (classed as AVCHD-LITE because frame size does not represent 1920 x 1080 display).
MP3 (MPEG 1 Layer 3) audio compression
and those wrapped with the .avi format
All that is characterized by the frame size 600 x 380 (square pixels).
All that being said...
Try the .mp4 choice even with the AVCHD codec (alternatively .mov). But, install QuickTime (latest version).
My fuzzy recollection is that AVCHD.avi is a problem for Premiere Elements. As for QuickTime, it is a Premiere Elements requirement. So, it will do more than just allow you to work with this specific project.
But, what you could try with what you have (AVCHD.avi) is to rename just the file extension of the file
.avi to .m2t
or
.avi to .mts
or
.avi to .m2ts
or
.avi to .mov
or
.avi to .mp4
But do install the latest version of QuickTime.
You have what I consider an atypical video (atypical in what Premiere Elements offers in the way of project presets, looks more like 16:9 than anything else. Where are you going export wise with this footage. Consider:
1. Setting Premiere Elements 11 project preset manually (assuming that is what you have)
NTSC
AVCHD
AVCHD-LITE
720p30
To set project preset manually,
File Menu/New/Project
NTSC
AVCHD
AVCHD-LITE
720p30
Make sure to put a check mark next to "Force Selected Project Setting on This Project" before you exit the new project dialog.
Then, import your file via Add Media/Files and Folders/ and into Project Assets from where you drag your file to Expert workspace Timeline.
A major goal in setting this project preset is to direct the project to set up the correct space in the Edit Mode Monitor for editing purposes.
More later.
Please do not hesitate to ask for clarification on anything that I have written.
Thanks.
ATR

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Why does PE not find AVI codec?

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