Do not give up.
Recently we had a thread where the Premiere Elements user was getting trails with movement of windows and such. And, not so long ago, we were involved in another thread where the user had similar and worse display issues. This Premiere Elements user was using Windows 7, do not recall now if it was 32 or 64 bit. In the end the core was a conflict between Premiere Elements and one of the Windows 7 High Contrast Themes.
But, the Windows 7 High Contrast Themes fix did not work to resolve the problems of this more recent case. But, the core here turned out to be one of the Windows 7 themes - the Windows 7 Basic. The answer was to use one of the Aero themes and remember to put a check mark next to "use visual styles on windows and buttons". Please see the details of TS520.
It may be a stretch reaching out to this possibility, but worth a look.
The above is based on Windows 7 64 bit. I am not sure if Window 7 32 bit has the same Windows 7 themes setup.
We will be watching for your results.
Thanks for the follow ups.
ATR