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This would seem very strange to me seeing how I not very fondly remember processing a 200 megapixel photo in Photoshop CS on a computer with 512MB of RAM about 10 years ago. It was slower than my ability to do calculus at 6am without a coffee but it did eventually get there.
I'm not sure about Elements but Photoshop CS6 has an option where you can select maximum memory and assign scratch disks under it's preferences. May be worth a look?
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