The instructions you are referring to (number four) are for installing the Camera Raw plug-in, not the DNG converter. The DNG converter is a separate, independent program used for converting your raw images to DNG copies. I'm not sure what version was the first one to support your camera. But you should download and use the latest DNG converter (currently version 6.3) to convert your CR2 files to DNG. Then you should be able to open those DNG files in Photoshop/Camera Raw.
I now uninstalled the older 5.1 version and instead installed the DNG Converter 6.3 separately and it works perfectly.
About the Camera Raw 5.6 update: I also downloaded the plug-in (which I think should be the last version CS4 supports) and can now open my .CR2 files in PS, Bridge previews them too. :-)
Is it advisable to keep both, .CR2 as well as .DNG files? Why is it that my .DNG files are lighter than the native .CR2?
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It would be my recommendation to keep your original CR2 files. You may want to open some of them in DPP for one reason or another. In that case the DNG files would be useless. I have no idea why the DNG files are lighter. Unless you are applying some sort of preset, everything should be the same.