Instead of assembling all the images in one Premiere Elements project, divide the images among two or more smaller projects. When you have finished editing each of the smaller projects, combine them into one project for final output. For instructions, see "Combine projects (Premiere Elements 4)" (TechNote kb403897).
The optimal number of images to import into each smaller project will vary from system to system. If your system meets but does not exceed the Premiere Elements system requirements, start with 100 images. If you do not encounter error messages, freezes, or crashes, increase this amount.
If you are working with a slideshow from Photoshop Elements, another option is to import the slide show into Premiere Elements as a single Windows Media video file instead of as multiple image files. The advantage of this approach is that it creates a smaller, simpler Premiere Elements project; the disadvantage is that the transitions and image order are fixed in the Windows Media video file.
To output a Photoshop Elements slide show as a Windows Media video file: