Honestly I didn't even know what an ACR version was - let alone whether or not they were compatible between programs ... but Bill was right.
My Lightroom V. 4.4.1" uses ACR V. 7.4
Photoshop Elements V.12 uses ACR V. 8.5.0236
Not sure it those are incompatible - but I can see why they might be.
I have calibrated all my monitors to sRGB and set sRGB to the color space for both programs.
I'm still not able to open a photo, from native RAW in Lightroom, into RAW when I "open in" PS Elements (it opens in JPEG).
This is way over my head - but I appreciate you sticking with me. Any other suggestions?
PS.... ADAM - the picture I attached is of Nadya with the sting ray ( from Alex Mustard's Digital Madness Week this September). I tried the spot remover in lightroom - but I have SO many spots - that I need something more to fix them (unless I'm doing something wrong). Elements works a lot better.