How can I use Emacs ESS mode with R markdown?

Download the zip for polymode from github.com/vitoshka/polymode or, if you are a "git guy", you might use:

git clone https://github.com/vitoshka/polymode.git

Add this function to your Emacs init file:

(defun rmd-mode ()
  "ESS Markdown mode for rmd files"
  (interactive)
  (setq load-path 
    (append (list "path/to/polymode/" "path/to/polymode/modes/")
        load-path))
  (require 'poly-R)
  (require 'poly-markdown)     
  (poly-markdown+r-mode))

Now, if you already have ESS installed, just open your rmd file and type Meta-Xrmd-mode and watch the beauty of Emacs.

Update for MELPA users

polymode from MELPA uses a flat file structure. When you install from an Emacs repository via M-x list-packages or like facilities, you get your package files straight where they ought to, i.e.: (expand-file-name "~/.emacs.d/elpa"), therefore do comment the above load-path code:

;;  (setq load-path 
;;      (append (list "path/to/polymode/" "path/to/polymode/modes/")
;;          load-path))

polymode is being developed which does/will allow you to write markdown with R chunks (for processing with knitr).

Instructions for setting up polymode+rmarkdown are in the README

It is not yet done, but is progressing. See also this discussion on the ess-help mailing list (gmane archive|mailing list archive)

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Update: polymode has been released on MELPA, simplifying the installation process by using emacs' existing package mechanism. See the announcement on the ESS mailing list here.