Error while trying to open 2 psd files in Photoshop

Hi,
I recently got 2 imac's with Leopard, installed cs3 and when one system attempts to open 2 psd files in Photoshop, I get a message – "the program has encountered an error". Even when I click ok, it pops right back up. The only way to get it to stop is to use force quit.
I googled some forums and tried to clear cache, reinstall cs3, reset preference file etc., but of no use.
Any HELP would be appreciated.
Thanks in advance.
