Originally posted by kjacks ... tried to open in PSE 7 but it doesn't recognize the pef file...
As others have suggested, DNG is probably the better choice in any event. I also recommend using it exclusively.
That said, you probably want to upgrade to a newer version of PSE. The newest, PSE11, will recognize many formats that the older versions do not (example - the ARW raw files produced by my NEX-5R were unrecognized by PSE 10 but work fine in PSE 11. Adobe has been accused of failing to provide backward compatibility for just this reason, to force users to upgrade. Regardless, the improved and added features of 11 versus 7 make it definitely worth the $60.00 or so to upgrade. Content Aware Healing and Fill alone were worth that to me.