When I first got PS7, I was blown away by the powerful functionality. But I soon realized that they completely ruined the TGA format. I could no longer use the alpha channel the way I could in all other versions. So after a little bit of digging, I found these fixes on adobe's website:

Windows: http://www.adobe.com/support/downloads/detail.jsp?ftpID=1544
Mac: http://www.adobe.com/support/downloads/detail.jsp?ftpID=1543

This will make TGA's "work" again. I think installing PS7's SP1 update will also fix the problem. Over the past couple years since I originally ran into this, I've talked to several people who were frustrated about this so I'm sharing the wealth.

Hi there!

Yep, Photoshop 7.0.1 does indeed address the issue! If you render TGA files from a 3D package like I do (3D Studio MAX) those alpha channels are critical indeed!

Seems to me I have a sign around here somewhere I designed that utilized a 3D object rendered independently and then inserted into a comp for a client... Hmmm... nope. Must be at work, lol!

Anyhoo, thanks for the tip! I just realized my Photoshop at home was behind so I updated it accordingly!

Cheers,
Phoenix

Nice tip. But I more use TIF image file standard. It also have an alpha channel so there is no need for me to use TGA. Anyway my clients also do not use TGA. Everyone are probably using TIF format to store theire images to an good quality format...