Canon don't make Elements, Adobe do. And, yes, it's far better than version 2, even better than version 3 for that matter. I've been using Photoshop 7 for 3 years, and Elements 4 is even better than that as far as photo-editing is concerned. I couldn't afford a later version of Photoshop so I got Elements 4 and I'm well impressed.
This may not apply to you just yet, but if you ever start shooting raw with your digital camera, you can open and process the raw files from a whole host of different cameras right there in Elements without having to use a separate program. And even if you don't shoot raw, Elements 4 is the most complete photographer's editing program I've used which doesn't cost the earth.
I have 4 on one computer and 2 on another... the reason I haven't put 4 on both is that you can download Channel Mixer and some other useful PS tools that are absent in Elements. The last I heard these plug-ins worked on versions 2 and 3 but not in 4. AFAIK 4 like its predecessors doesn't have Channel Mixer... or am I wrong there? tbh I only got 4 recently and haven't played around with it very long.