I have had PSE2 for about 3 yrs. and it worked fine until about a month ago. Then, every time I try to open it, it comes up and gets to the point where it says, "initializing,help" and it hangs on a popup error which says, "Could not load a transcoding service". Just below that is says, "Xerces Panic Error". As soon as I click the OK button, Photoshop Elements vanishes.
I've done numerous deep searches with Explorer (including the registry) for Xerces. Found only one instance of it, which was in Paint Shop Pro X. I deleted that one. But it didn't help.
I uninstalled Photoshop Elements and searched out and manually deleted every remaining trace of it, then re-installed from the original CD. Still get the same crap. So I think that proves Xerces is not a missing or corrupt file that Photoshop Elements needs. If it were it would have been fixed with the new install.
Have spent 8-10 hrs searching the Web for info about Xerces and how to wipe it out. Found that it is open source code created by Apache and is often used as a transcoding parser, but comes in several versions and is sometimes used for many different functions. Haven't found a clue about how to get rid of it nor uncover it's secret hiding place.
I constantly run Norton Internet Security and have run Rootkit Revealer just a few days ago.
Would just get PSE4, but am afraid this Xerces terrorist might harass it too.
Thanks for any help.

Try temporarily disabling your plugins and uninstalling your scanner drivers (especially if it's an HP). There's nothing in Elements 2 that uses Xerces, but it could be trying to load something that does.

Hey Doug,
How do I disable plugins if I can't get Photoshop Elements open? Anyway there are no plugins that didn't come with Photoshop Elements. I just reinstalled and haven't added anything since. Photoshop Elements hangs and the error pop up right between where it says it's initializing fonts and help. Again, nothing has been added to any Photoshop Elements files since the new install. Never-the-less I've searched Photoshop Elements's help files and checked the dates on all of them. They all show the same modified date as the reinstall.
As far as something in fonts possibly being a problem, I don't find any font folder in Photoshop Elements. Does it load fonts from Windows fonts folder?
As far as I can tell from all I've found about Xerces, it is most commonly used in XML. And mostly as a parser. I don't envision such stuff being in a font file, but all I know about programming can fit in your eye without pain.
Thanks for the reply.

Disable the plugins by temporarily renaming the plugins folder. But I suspect it's your scanner driver, so just uninstall that.

I doubt fonts have anything to do with it.