Check this thread. Also, use the DPP that came with your 40D. Others may have much better ideas as I have a rotten work flow and don't (but should) use bridge.
i dowloaded version 4.5 but it says that will only work for CS3 and it is still telling me the same thing when I try to open it in photoshop and bridge. Also it says that nothing needs to be updated
If you want RAW files from your 40D (straight into PS) you're going to have to upgrade. CS2 doesn't support the newer camera profiles (40Ds use CR2, now CRW files). I couldn't get any files opened from a Mark III either 'til I upgraded and the photographer was shooting FOR me as work for hire so I had to. (last time I checked anyway so I'm guessing it's still true)
This is what I do (and I have PS CS2, running on a jumped-up ol' iMac).
Open your RAW or NEF files in Preview. Under file, choose Save As... and under Format, choose Photoshop.
Now open Photoshop and go to open the folder where your RAW files are stored. Only the files that are converted to PS will be in bold; all others will be greyed out. Those are the files you converted.
i dowloaded version 4.5 but it says that will only work for CS3 and it is still telling me the same thing when I try to open it in photoshop and bridge. Also it says that nothing needs to be updated
Ya, 4.5 only works for CS3. It is one of adobe's ways of making people upgrade to the newest software. They don't support their older programs with the newer cameras. I have CS2 as well and can't do ACR with my D700. I'm just going to wait now till CS4 comes out and then upgrade to it then. For now you're going to have to get DNG camera raw. It will make copies of your raw files and then you can open them in CS2. That is what I did. You can find it here- //www.adobe.com/products/dng/