Like it or not, while the other versions of PS/PE (PE3, 4, PS CS, PS CS2) that Adobe says will not work with Leopard do actually work, PE2 and PS 7 are dead, dead, dead in Leopard.
I agree with you! PS 7 actually worked correctly in 10.4 and I am presently using it (again!). Check out the raging "discussion" at Adobe's site regarding flaws in PS CS3 and the "Save for Web" feature... specifically it's weird habit of screwing-up colors while stripping profiles, changing profiles and converting to sRGB improperly.
I will not be switching to Leopard until the issues with PS CS3 are resolved, period... and unfortunately, that may never occur!