The differences between Elements 7 and 10:
http://prodesigntools.com/photoshop-elements-10-vs-9-8-7-6-differences-between-version-compare.html
Lightroom isn't just for processing photos, it's a complete asset management system that includes features like Elements' Organizer in that you can tag photos, rate them, search them, set up Collections (like Elements' Albums); and it has a Develop module in which you process your photos for light, tone, colour, warmth, etc, and also use local adjustment brushes, gradients, crop and so on; and a Print module for printing one or several photos; and a Slideshow module for producing slideshows on your PC or on the web.
It's a complete photographic workflow solution that's worth the cost, and even more worth it now that Adobe have a 40% discount offer.
I use Lightroom for managing my photos and doing initial processing on them. If I highlight a photo and press Ctrl+E the photo opens in Elements 10 from where I can make all the changes I want, press Ctrl+s to save, Ctrl+Q to quit, and I'm back in Lightroom with the edited photo as a .psd file. It's a great way to work: very quick, very easy.
If you were deciding whether to go for Lightroom or upgrade to PSE 10, I'd say look at the link I gave you above and if you don't think the extras that PSE 10 has are worth the upgrade price, go for Lightroom instead while it's so cheap. Google for some tutorial videos to learn the basics (or ask in these forums) and you might find that you no longer use Elements very much at all. And if you don't get on with Lightroom, you could possibly sell it for what you bought it for.