I tried the free version of Prism and used DV Encoder NTSC (Direct Show) and DV Audio 4800Hz.
The DVD I converted from was a widescreen project created with DVDAS and burned with ImgBurn. I know- why did I convert that? Because it was the only DVD I had with me when experimenting on my "non-editing" computer at work.
When I play the AVI in Windows Media Player or Real Player, it is smaller and sightly out of proportion (a round object is taller than is wide). The original DVD played at the proper proportion. I have not yet tried it in Premiere Elements.
Does Prism not support widescreen?