Hi Diane!
Well, if what you heard is in fact what you are relaying here -- that is if the guy told you that Elements was only 8 bits per channel, then I'd say he was all messed up!
But, it can be easy to get our signals crossed and not fully understand what someone is trying to tell us, so I won't unleash an internet rant about him, just get some facts straight.
First of all, when you open a Raw file in Elements' Camera Raw, it has not yet been rendered or rasterized into an image, the Raw data is what came out of the camera still and you are looking at a preview/temporary image. Camera Raw lets you click that little link and set some meaningful uptions for how the final image is rendered -- you can choose to open an image in Elements that is 8 bits per channel or 16 bits per channel, and that's what you will get to work with. You also will need to designate a color space (sRGB, aRGB, ProPhoto, whatever choices Elements gives there). Also, something that has always seemed a bit odd to me is that you can choose from a number of resolutions but that's there as well.
All Raw processors that I know of give you the choice of using 8 bit or 16 bits per channel, whether converting and saving in DPP or exporting out of Lightroom, or using the Edit in Photoshop functions. As far as Lightroom offering 32 bits per channel, by the way, I don't know of any LR option to do that, so that's something else I'd take with a grain of salt (although HDR software often can present a 32-bit image to Photoshop to do whatever preliminary adjustments you need to make before converting to say a 16 bit tiff).
Now as to Elements, here's the scoop: once you open in image from the Raw processor, or Lightroom or DPP as a 16 bit tiff or psd, then yes it opens as a 16 bit image but Elements has only a pretty significantly limited range of operations that it can do with a 16 bit image. At some point you will try to do something and a message box will pop up saying you can't do this operation on a 16 bit image -- do you want to convert this to an 8 bit image?
Actually, Photoshop CSx has always had some things that didn't play in 16 bit mode, but they are much fewer in number than are in Elements and CSx tends to be pretty aggressive in upgrading things. Elements will tend to run against that wall quite a bit quicker.
So, as to your workflow, you want to give some thought to this: what do you want to do in 16 bit mode? In general 16 bits gives you more latitude in color and luminance tones to make broad adjustments -- there is more data to work with so you can do more stuff without risking artifacts. In this sense an 8 bit tiff has the same narrower 8 bit "space" as an 8 bit jpeg, although the tiff has not undergone jpeg compression and so avoids the additional pitfalls.
But, there are a lot of things you can do without needing 16 bits per channel -- plenty of adjustments and filters that just don't need the "space". The key is to determine what you want to do that could benefit from being in 16 bits, do all that, then convert to 8 bits and do the other stuff.
Now, I hope you see things a bit more clearly: this is not a Raw thing and Lightroom vs. Elements vs. DPP -- they all deliver the goods according to very similar preferences that you choose whether 8 or 16 bits, and having the two "common" color spaces (sRGB, aRGB) as well as each offering one or more "wide" color space for "special" purposes (in fact, Lightroom uses a wide color space for its internal processing, called MelissaRGB, whereas Camera Raw and DPP will change their working color space when you change that color space output direction.
Umm, OK, did I hit the bases, or miss something? Well, I hope I covered them, but chime in for more questions!
!
