My favorite method is to roast peppers then freeze them for later use. I line a cookie sheet with foil and place the peppers on the sheet. Roast at 400 degrees for 20 minutes, then turn the peppers and roast them for another 20 minutes. The skin should be charred. Cut the peppers open, pull out the seeds and stems (they usually come out in one piece), and peel the charred skin off. At this point, you can cut the peppers into strips or you can dice them. They are now ready to be put in Ziploc bags for the freezer. Have fun!
OK. Here are my suggestions. Make sure you are in Expert Mode in Elements. Then, drag the DLP (Dramatically Lifted Photos) file into your workspace. Make sure you click on the Layers Palette. You will find that tab at the lower right side of your screen.
Then, drag the photo you want to use from the file where you keep it into Elements. It should appear in the Photo Bin. (Click on the sower left corner of your screen to activate the Photo Bin).
Click on the Photo Mask layer in the Layers Palette to highlight it in blue. Then drag the photo into your work space. It should appear above the Photo Mask layer in the Layers Palette. Clip the photo to the layer by clicking Ctrl G. You can resize the photo by clicking on the Move Tool (found on the left side of your screen under Select). If you need to resize the photo, click on the corner of the photo and either shrink or expand it by using your mouse.
When you have resized the photo, then click on the Photo Bin and click on the project page you want to use the frame on. That usually is your scrapbook page. Then drag the DLP with your photo in it into the project page and resize if necessary.
If you need more help with these frames, ask away.
I don't have that particular template but have some that are similar. First, make sure you are in expert mode in PSE 11. Then, drag the template into your work space. That's my terminology for the area where you will create your project. Next, make sure you have the Layers tab clicked. That's located at the bottom right. Now, think about how you want the final result to look. With a curled paper, you will have one color on the back side and another on the front before you curl it. It might help to grab a piece of scrap paper and curl it so you can see how this will work. I'm a very visual person so that step helps me.
If you drag papers into PSE 11, they will appear when you click on Photo Bin. That's found on the left bottom side of your screen. Decide what paper you want where. For example, what paper do you want on what would be the back of your paper, what paper do you want on the front. When you have thought that through (at this point, I'm usually consulting my real paper scrap), then click on the layer in the layers palette that you want the paper to appear on. Make sure that layer is highlighted. Then drag the paper from the Photo Bin into the workspace. Click Ctrl G. That will clip the paper to the highlighted layer. Just keep repeating this until all layers have paper clipped to it. You may end up clipping the same paper to several layers.