Yes, it does, Elements it's the lighter verson of actual Photoshop, thus explaining why it's cheaper. Adobe photoshop CS retails at about £500 if you're lucky.
I don't know the conversion rate, nor do I care to look it up, but Photoshop CS2 was $170. I wouldn't have bought it even if I had that extra $70 anyway, since that'd probably be better spent on music.
Well...knowing my musical taste, maybe not