First of all, a quick clarification. Lightroom does NOT use Camera Raw. Camera Raw is a plug-in for Photoshop and Photoshop Elements. But you are correct, if your camera is only supported in the latest version of Camera Raw, then you will need Lightroom 3.3 or Camera Raw 6.3 in order to edit the raw files directly. One thing you might try. Locate a folder containing raw files, or open that folder and highlight the raw files, and drag/drop them onto the icon for the DNG Converter. See if that will start the conversion process for you.
Jim - Thanks for the response.
I can drag NEF files onto the DNG converter and it will convert them. It still does not show a directory of NEF files but will convert the ones I drag to the icon.
LR recognizes the DNG files and opens them without problem. PSE is another issue. When I open PSE, I cannot see the DNG files in a directory. However, when I select the DNG file and hit Open With PSE, PSE opens the file. Heck of a way to run a railroad, isn't it?
Interesting that you say that LR does not use ACR. When I open LR and hit "About", it gives the version number and shows Camera Raw 5.7 right on the info page. Wouldn't there have to be some kind of conversion system from RAW to something LR can interpret? If it does not use ACR, I wonder why they say LR 2.7 can not read the new camera RAW files?
I'm still not happy with the way the DNG Converter is working at this time and refuse to spend more money on Adobe upgrades until I am sure they work better than the DNG Converter process (which appears to suck).
That "About" screen is just telling you what version of Camera Raw corresponds to that version of Lightroom. All of the technology that is in Camera Raw is part of Lightroom natively. Lightroom does not use the Camera Raw plug-in.
Sometimes failure to display images is caused by a corrupted video driver. You might try switching to one of the standard sRGB profiles and see if that fixes your display problem.