I had the same problem and found there was two solutions. The first you know... wipe your hard drive and reinstall everything. The second is lest drastic, because it involves tinkering around in the Registry. Iassume you may know how to do the first so I will try to explain the second
1] Backup your Registry, and create a restore point just encase things go a bit awry
2] Make sure you did step
3] Uninstall Photoshop
4] restart window
5]run regedit (if you do not know how to run regedit, maybe this solution is not quite for you
5] Do a search of the registry, for any reference of Photoshop 7. and delete it. (there are quite a few so you may have to press F3 quite a few times to find them all (F3 repeats the last search option in Regedit
6] After you have deleted any references to Photoshop 7 from the registry. Find the folder where you installed Photoshop 7 and delete it. ( It is usually "C:\Program Files\Adobe\Photoshop 7.0" with the default install.
7] restart windows
8]re - install Photoshop 7
If after you followed the instructions that I have outlined here, and the error continues this may mean that you have left something behind in the registry. If so you must restart from the beginning, and try to be more thorough. I know this is a long drawn out proccess, but so is reinstalling, updating windows. (finding drivers setting up the machine you like it. Reinstalling favorite software. Cursing because you did not backup IE favorites, Outlooks address book and settings andd... I can go on for ever
The key is be to methodical and careful with the registry. Once it took me three tries to actually get it
Oh yeah the Registry is key to the way Windows works so think very hard before going poking around in there. and BACKUP!! Backup!! BACKUP!! Backup!! BACKUP!! Backup!! BACKUP!! Backup!! BACKUP!! Backup!
Good luck!!
