I'm not much help here becaus I do not have Photshop 7. I have heard that it
only works propoerly with MAC OS 10 and not to get it unless you have that
operating system. I think that it had more to do with the OS than with the
model of the computer.
HAve you tried clicking directly on the photo from your digital camera and
seeing if it opens in photoshop (rather than importing it) Save it to the
desktop and then click on it.
Not much help here - sorry!
Sometimes my photoshop does not show all of my choices if memoy is low. Can
you assign some more memory to Photoshop?