You could always straighten photos with the crop tool in Elements, but now there is a dedicated tool that makes straightening even simpler. Just click and drag along the horizon line of your photo. Canvas options let you choose whether Photoshop Elements 4.0 should automatically crop the photo so the new, rotated version has no border, resize the canvas to show the whole image, or crop the rotated photo to the original size.
Photoshop Elements Review