I found this weird "work around" on another site, and it works:
I found this thread when I experienced "about" the same problem. If I click the <Select Folder>, and browse to a folder that contains .CR2 files from my Canon EOS-60D, the DNG Converter 6.3 proudly declares, "No items match your search".
Then, I tried to drag a .CR2 file from Windows Exploder onto the DNG Converter shortcut-icon on my desktop, and it worked! I can also drag multiple selected files from within a directory, or a complete directory there, and it works. (I can NOT drag files onto the DNG Conv itself, just onto the shortcut icon)
I have Win7/32 and a funny thing is,that when I tested DNG Conv 6.3 on my old PC which runs Win XP/SP3, the <Select Folder> function worked without a hitch. I could even browse the very same CR2 folders on my Win 7 PC, over Wi-Fi, and it worked OK on XP.
So, the problem with Adobe's DNG Converter 6.3 (and new Canon .CR2's) seems to be OS dependent. It looks like it doesn't work correctly on Vista or Win 7.
Check if the drag system works OK on Vista, as on Win 7.