importing NEF files into photoshop CS2

Hey there. Ive been taking photos now for a couple of months with my Nikon D40 D-SLR. I just invested in photoshop CS2 and immediately had problems. I shoot in RAW for all the obvious reasons and tried opening these files in CS2, ofcourse it wouldnt work. However, I installed the Camera Raw plugin that I read about on this forum and got a little further. Photoshop doesnt immediately reject my files anymore, it gives me a window with the option of changing the white balance and a couple of other things. When I click ok I get a dialouge box saying

'could not complete your request because of a disk error'. Im completely stuck now and really need my software working ASAP. Hope you guys can help. Thanks in advance.