I've been stumped by this problem, I import .avi's created in Premiere Elements 4.0. Then set them to transcode while I build the menu. Encore transcodes the files in the background, (I can see them in the project folder)and then sits there for as long as I'll let it (more than 24 hrs once) claiming that it is importing the transcoded files. If I stop it, the transcoded files that I could see disappear and I am left with the issue of still needing to transcode the files to build the dvd. I've tried letting it transcode as part of the build prior to burning, but I get the same results. Anyone have any thoughts?