Need Help Converting From Raw

[Norfindel]

I think that Photoshop 7 is too old to include Adobe Camera Raw. If you mean the RAW option in File -> Open from Photoshop, it used to mean "an image without any format, just the raw data". That's not to open the RAW files from digital cameras.
Canon's Digital Photo Professional should open the files, or the Photoshop version that is sometimes shipped with Canon's cameras. You can download Canon software for the 40D here (note that i selected Windows XP, if you have other OS, change the option): http://www.usa.canon.com/consumer/co...&modelid=17779

EDIT: If you mean Photoshop Elements 7, it should be new enough to have Camera RAW. Try to download a new version of the Camera RAW plugin in the Adobe site. New versions of the plug-in have support for new cameras.