Hi Mike,

Let's start from the beginning. First, when you said you "downloaded the
software" I assume you meant the Canon software that came with the camera.
That's fine...the Canon software will open and edit RAW files, but has nothing
to do with Elements. I also assume your Camera is the EOS 50D.

If you want to edit RAW CR2 files in Elements, the Camera Raw software must be a
new enough version to support your camera. Version 4.6 added support for the 50D
and has since been superceeded by newer versions. If you purchased Elements 7
prior to the release of the 50D, or shortly thereafter, it is quite possible you
will need to download the free update. Go to the Help menu then select Updates.

I would suggest that you read the section on "Camera raw files" at
http://help.adobe.com/en_US/PhotoshopElements/7.0_Win/. It has a very good
tutorial on using RAW files with much more info that I could give you here.

Hope this helps. If you're like most of us, once you start using editing RAW
files you will be hooked and likely never go back. There are so many advantages.

"Hutch"