Why is playback video quality not as good as the source?

Hi.  I'm not new to PrE but am new to the forum.
I've been using PrE 2 for about 7 years.  I got a newer computer running Windows 7 and basically was forced to upgrade to PrE 12 because PrE 2 didn't run very well on the newer machine. Once I installed PrE 12, I was eager to jump into my first project on this machine.
I expected that with a newer machine and the latest software, I would get outstanding results--hopefully much better than what I always got with PrE 2 on the old machine.  With PrE 2, it was not uncommon that the imported video seemed lossy on playback or for whatever other reason seemed not as good as the source video.
Unfortunately, the results on the new/new were no better than the old/old.  So I switched to my wife's (even newer) machine running Windows 8 and got the same results.  Then I thought that perhaps the output to DVD would be better than what I saw in the PrE editor.  No dice.
The video quality of the source isn't the greatest (see below), but I expected that the PrE 12 would be no worse.
What went wrong?
Here's what i'm working with on the current project:
Machine 1:
HP EliteBook 8560w
Intel Core i7-2640M 2.8 GHz CPU
Window 7 Enterprise SP1
2 GB RAM
360 GB available HD space
Machine 2:
Dell Inspiron 3521
Intel Pentium 2117U 1.8 GHz CPU
Windows 8 Touchscreen
4 GB RAM
400+ GB available HD space
Video Source:
iPhone 4 video (MOV format)
Thanks for ANY help you can give me.
BTW, I noticed that Steve Grisetti is one of the frequent commenters on this forum.  In case you're reading this, Steve, I want to thank you and Chuck E. for your PrE books.  I purchased one several years ago and found it extremely helpful.  And surprisingly, I found that with PrE 12 I could still use the book that I purchased before because most of it was still relevant to the new software.  Still a great purchase!!

kcarter
Please excuse if I mention things you may already be aware of, but I did not want to take anything for granted.
The installed RAM on Machine 1 is too low for HD work, and I wonder about the processor on Machine 2 even though it has more installed RAM than that on Machine 1. For now, I will bypass the usual drills and get to the source media and project settings.
1. From what I can put together, your source media from iPhone 4 are 720p up to 30 frames per second. That usually translates into a variable frame rate which can be problematic for Premiere Elements. The variable can lead to audio out of sync, but not necessarily. If all else fails, then it is onto HandBrake or the like to change the variable into a constant frame rate.
2. One of the features of version 11 and 12 is the program taking over the setting of the project setting based on the properties of the first video drag to the Timeline. Some times it does it OK, sometimes not. When not, then you set the project preset manually yourself based on what you know to be the properties of your source media. Please refer to the following which includes how to set the project preset manually.
http://www.atr935.blogspot.com/2013/04/pe11-accuracy-of-automatic-project.html
Based on what I have read about the properties of the iPhone 4 video, I would suggest the project preset (assuming a NTSC set up)
NTSC
AVCHD
AVCHD-LITE 720p30
One of the important things to remember is that Premiere Elements 11 and 12 have as their default project preset
NTSC
AVCHD
Full HD1080i30
and not the NTSC DV Standard of versions earlier than 11.
When 11 and 12 do not get the automatic project preset correct, they do not give you the closest fit, rather they give you their
default NTSC AVCHD Full HD1080i30 which is not going to be appropriate for 720p video.
Classically it is written if you have the correct project preset you should have no colored line over the content when you bring the video to
the Timeline manually set. But, just the variable frame rate can trigger the unrendered indicator (orange instead of red in versions 11 and 12).
So, rendering the Timeline would be indicated to get the best possible preview under these circumstances.
Do you have the latest version of QuickTime installed on either of your computers?
More later.
ATR

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