When you load a raw image into Photoshop you're greeted with the ACR dialog box. Within ACR you can specify the target color space and make adjustments to control image tonal values.
After editing in ACR choose OK to import the image into Photoshop proper. The adjustments in ACR parallel settings you can make within Photoshop.
White Balance. Adjust Color Temperature and Tint to control color casts.
Exposure. Sets the white clipping point. Similar to setting the white input slider in Levels. Somewhat of a misnomer, Exposure does not shift the entire curve. Alt-drag the slider to observe clipped pixels.
Shadows. Sets the black clipping point. Similar to setting the black input slider in Levels. Although a setting of zero includes all shadow detail, it often results in flat images. Slightly higher values (around 5) often improves tonality. Alt-drag the slider to observe clipped pixels. Don't be afraid to clip a few for richer blacks!
Brightness. Controls gamma. Similar to setting the gray input slider in Levels.
Contrast. Similar to an S-shaped curve in the Curves dialog box.
Saturation. Similar to setting Saturation in the Hue/Saturation dialog box.
Before making adjustments be sure that the you've specified the correct color space (Space drop-down box at the bottom of the ACR screen). The color space you choose will have a dramatic effect on the results.
Typically you'll want to make adjustments in the order that controls are listed in the dialog box. White balance is accomplished by adjusting Temperature and Tint. ACR has two calibrated profiles for each camera: tungsten and daylight. The Temperature and Tint controls interpolate between these two settings. Profiles are generic for each camera type, so you can fine-tune using the Calibrate tab. After setting color temperature adjust the Exposure, Shadows, Brightness, Contrast, and Saturation.
Adjustments done in ACR are done in linear space before the image as been mapped to a color profile. Consequently, color temperature adjustments done in ACR are often superior to attempts to achieve color balance within Photoshop. Under the Detail tab adjust the Sharpness slider to about 25%. To avoid sharpening artifacts be careful not to overdo initial sharpening. In fact it's best to under-sharpen at this point. You can do a proper job of it, within Photoshop proper, after the image has been resized.
As you change settings you'll notice the Settings drop-down list changes from Camera Default to Custom. After you import an image into Photoshop, the settings you make are saved in a database on your disk. The next time you open the raw image these settings are applied and the Settings box will indicate Selected Image. To revert back to the "true" original, choose Camera Default again.
With the Advanced button enabled, click on the small right-arrow to view the ACR dialog menu. Under Preferences you can choose to save settings in the Camera Raw Database, or as a sidecar .xmp file. The centralized database is located in the user's Application Data folder (Windows) or Preferences folder (Macintosh). Settings are indexed by content, and will continue to apply even if the image is moved or renamed. The xmp file is recommended for long-term storage and provides a way to share settings with other users.