File seems to corrupt?

well I cant seem to find my prefs file...  i checked out the tutorials but no luck.
I run win xp pro..

it seems that image ready is causing the problems..
if I load a file into image ready from PS... then save it in image ready.. and go back to PS i get the error... that it is open and cannot be saved and then it shuts down and I try to reopen the file and I get that corrupt error..

I tried reisntalling also.. with no luck.

Going to give what mathias said a try ....

I run win xp pro as well and I was able to find the prefs file. This is the exact name "Adobe Photoshop 7.0 Prefs.psp"
for photoshop 7, and this is the path under xp

C:\Documents and Settings\ikitaychik\Application Data\Adobe\Photoshop\7.0\Adobe Photoshop 7.0 Settings

"ikitaychik" is the user name

I'm also running in the same environment, and updated Photoshop 7/ImageReady 7 to 7.0.1 at the link below and the problem was resolved; hopefully if your issue is still unresolved, this will help you.  
http://www.adobe.com/support/downloads/main.html

http://www.adobe.com/support/downloads/product.jsp?product=39&platform=Windows

If the issue is related to type / layer and this error message evoloved, again, 7.0.1 fixes it. Specifically, Photoshop 7.0 can create a text layer that is written incorrectly into a PSD, TIFF, or PDF file.   More here:
http://www.adobe.com/support/downloads/detail.jsp?ftpID=1546

sorry. I never found a cure for the cause... I ended up just intstalling the newest version 8.0  ..after reformatting my HD...  
Please close this topic if its not already.