In terms of non-destructiveness, in Lightroom nothing ever is changed in the file. If in Elements, I edit a picture and save it as DNG/TIFF/JPEG and then reopen it and make another change and save it with the same name the first version is gone forever. Of course the raw file is there but every time you make a change then save the file can not go back a single step without starting over.
Since this thread is back in circulation, let's look at the underlined part again.
In Elements 4 (or 2) on my Mac's, I typically follow a workflow that starts with 10 raw or dng images. After opening in Elements all 10 images are open with the last image on top.
I make two sets of each image that end with different unsharpens; a web set (500x375 @ 72 ppi) that gets a web unsharp and a print set (5x7 @ 300 dpi) that gets a print unsharpen.
Much of what I do could be done in batch, but looking at non-batch flow, the same processes happen. The first adjustments are typical WB/color and after that I could save as tif or psd to have a WB/color adjusted non lossy, so making different size web and print files in the future does not require readjusting the WB/color. I do that with the great pics, not with the pics only my client cares about.
It does not matter if I save in tiff/psd at this point; as long as I leave the file open Elements is still working on the image prior to the save. If I continue making adjustments from there or back up a step or steps, making different adjustments, and save again as any type file it is a first generation from the original.
Since the web set requires no cropping I usually make the web set first. After the above adjustments where I may or may not have saved a tif or psd, I resize to 72 ppi and 500 pixels on the long side, then apply my web unsharp mask and save as jpg with quality 6. After the first process the unsharp stays web and the quality stays 6 for all 9 other images. After making all 10 web files, every image is still open, with the first image on top.
Now I back up to the step before resizing (last WB/color adjustment), crop for 5x7, resize to 300 dpi and apply my print unsharp mask. After this first unsharp process it stays in print unsharp for the rest of the images. The quality needs to be changed to 10 or 12 for all 10 images. After saving the "print" jpg I close the image. After saving all the "print" files there are no open images.
Now I open another 10 raw/dng images. Since the unsharp mask is still print, this second 10 images get cropped and saved as print files first (after the WB/color adjustments), then I make the web files. The third set of 10 images I make web first then print and so on.
If the image is spectacular I might make two web files (500 and 800 on the long side) and 3-5 print files (4x6, 5x7, 8x12, 12x18, etc), saving as many as 8 times (including the tif/psd). Each goes into a folder inside the original dated folder (500x, 800x, 5x7, 8x12, tif, etc). As long as I do not close the image, every save is a first generation save from the raw/dng.
If you save as a psd you can save all the steps as well, but I don't do that. I still have the originals and often my adjustment skills evolve to a point where I grab an old original and try new adjustments.
I am sure many got bored with this post and did not follow the whole text, but the cliff notes are;
in Elements (and full PS), every save in an edit session is a first generation save! That is what my PS guru taught me and my experience has confirmed it AFAIC.