PSP is very good at some things and very bad at others - I have PSP X and colour managed workflow was a bit of a nightmare compared to PSE and PS. However the version of PSE I have (a very old one) didn't have a channel mixer. There's a good PSP group on Flickr where you can find out the shortcomings of PSP:
Flickr: Corel Paint Shop Pro
There is probably an Elements group as well, but I never looked for it.
I started to save all my images in PSD format rather than PSPIMAGE, though when I moved to CS4 for my editing I found PSP had a handy batch convert that I used on the remaining PSPIMAGE files.
In the end I got CS4 as I wanted 16-bit functionality for all the processing (PSP X claimed it but didn't seem to support it for what I wanted to do), I wanted easier colour managed workflow, and CS4 brought along some new functionality that makes revising edits far easier. As I was a part-time student at the time I was able to get a student version - I also did that with Windows and Office.
Whatever you get, you need plenty of RAM in your PC and also plenty of HDD storage, plus at least one backup onto a separate device.