Finally figured it out. A co-worker went Googling and came up with this review. The user comments at the bottom reveal a lot.
Because of the way Photoshop/PS Elements optimize the Huffman tables to improve compression, the viewer can't display the images.
There is also a reference to this utility that will correct the images for display in the viewer. I have not tried it yet, but I have no doubt it will work.
The user comments on that page also note that the TV-out is lousy regardless of lo-res/hi-res image and regular vs HDTV television.
For $30, its a cheap gadget to own. I probably would not pay the full $50, and definitely not $129+.
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