Adobe Camera RAW (ACR) is a Photoshop component that allows users to open and edit raw format images from digital cameras.
The feature was introduced in Photoshop 7.0 as Version 1.0. Since then, new major versions of Photoshop come with a new major version of ACR. Each version of Photoshop is limited to a certain version of ACR (typically the last minor ACR version released before a new major version of PS). ACR is also available for many other Adobe graphics applications. Lightroom has built-in RAW format support which coincides with ACR.
As of September 2011, the current version of ACR is version 6.4.
Alternatives for ACREdit
Because older versions of ACR may not support newer cameras, Adobe recommends upgrading to the latest version of Photoshop. In cases where this is infeasible, other methods can be used to bring newer RAW files into your workspace.
Camera manufacturers often provide tools that allow their raw format to be converted to an intermediate format that can be opened by Photoshop (typically TIFF). Some manufacturers even provide their own image editors. The manufacturer's raw format codec is not sufficient for editing; it is meant only for viewing using the OS' native image viewer.
On Windows computers, a freely-available third-party program called IrfanView can be used in cases where a manufacturer's utility is difficult or impossible to find. IrfanView by itself doesn't open raw format files, but the "formats.zip" plugin can be easily added to provide support.
On Mac OS computers, raw format support is provided by Apple and is updated with each new OS release. Their support page can be consulted for details. iPhoto and Apple Aperture—a Lightroom-like program—can be used to convert raw images from supported cameras.
Adobe also provides a free "Camera Raw and DNG Converter"  for Macs and PCs, which "enables you to easily convert camera-specific raw files from more than 350 cameras to the more universal DNG raw format."
There is also free software for Macs and PCs, RawTherapee which not only opens RAW files, but is a complete RAW editor with an impressive list of features.