Raw CR2 is not readily read with with many software.... Photoshop failed as well. Not all Canon take RAW in CR2 anyway... seems like a new proprietry to Canon. My guess.
Rawshooter hasn't been updated for quite awhile now, since it was bought over by Adobe, so it won't be able to read the RAW files of newer cameras like the 400D.
Adobe Camera Raw shouldn't have a problem with reading it if you update it to the latest version.