I Think your solution is here!
You can find the Photoshop preference files in the following locations:
Windows 98:
Windows\Application Data\Adobe\Photoshop\7.0\Adobe Photoshop 7.0 Settings
Windows NT:
WinNT\profiles\<username>\Application Data\Adobe\Photoshop\7.0\Adobe Photoshop 7.0 Settings
Windows 2000 and XP:
C:\Documents and Settings\<username>\Application Data\Adobe\Photoshop\7.0\Adobe Photoshop 7.0 Settings
The Application Data folder is a hidden folder and not visible by default. If you do not see the Application Data folder, go to Windows Explorer>Tools>Folder Options>View and check the option View Hidden Files and Folders.
Many preferences are in the Windows registry. To reset your Photoshop preferences you can hit Shift-Ctrl-Alt upon startup
Antonio