...My questions is how to use/save/load raw photos. I have the XTi and it shoots raw.
This is a function of your software. You should have received ZoomBrowser with your Camera, maybe Digital Photo Pro also. Either can load, and view but DPP is a bit nicer to work with. You can also open RAW files in PSE4. You cannot save a RAW file back out in RAW format. But, you can save them to a .DNG file, which is Adobe's "standard" form of RAW. This is used for long-term archival reasons, but is not yet widely used. You can save any RAW file to many other formats (JPG, TIFF, PSD, etc.), just not the original format. This has an advantage in that you can never overwrite your original file, therefore never lose a file you don't intentionally delete.
BTW: You may want to download Adobe Lightroom, trial version, once you get a handle on using RAW (I say this so that you know what you will be gaining by moving to LR). It makes everything so much easier. PSE4 is a bit clumsy in comparison. (I've had both)
I understand that I will get a LOT less pictures per card when in that mode, no problem. However, can I shot in jpeg and in raw on the same card?
Yes. You may even be able to save both at the same time. I'm not sure if XTi's can save in RAW+JPG format, but if it can, the camera will save two images for each snap of the shutter: one to a RAW file and the other a JPG file. It gives you the best of both worlds, but takes up more space on your card. This way you get one unprocessed file (RAW) and one fully processed (JPG). You'll find after awhile, if you do your own processing, that you have much more control over the RAW image and will be able to make adjustments you just can't do with a JPG file, which makes RAW the choice for many people.
I know these questions sound stupid, but this is the first camera I've ever owned that has the raw feature.
Not stupid at all. I think most of us have asked the exact same questions when we started RAW.
Also, when saving them in PSE4 do I need to do anything special to them? I read somewhere that you have to convert them to jpeg for uploading purposes?

The "raw" thing totally baffles me - I need to do a LOT more homework on this subject!!!
Nope, PSE4 reads RAW files and when you want to save it out, just use Save As and select the JPG format. But, be forwarned, you have to download a RAW codec update from the Adobe website. Make sure you get the latest one for PSE4. The later ones will not work. They are for PSE5 or greater.
Go here to get it. Make sure you follow the instructions so you put the file in the right place.