ATR
Update to deleting whole 12.00 folder, duly done but I'm afraid no change in situation. I decided to check out what it does on my laptop, on which I have version 10 of Premiere Elements. It does exactly the same, so maybe I'm seeing a problem where there isn't one, and I only noticed because I'd made the error in changing the wrong setting in general preferences and thought it was to do with that. I've had no problem with playback when saving projects to movies with version 10 on the laptop, so I will leave it as it is and worry no more. (On the plus side, I've been able to resolve my windows start button right click issues and get my missing apps back this morning, it took a while but I got there in the end.)
Very many thanks for your time and efforts to help me resolve the issues I've had. You certainly reassured me that I'd got my settings right for PAL projects in General Preferences, and I'm sure your detailed answers above will help many others too. Thank you.
DSgal