Apple has stated that Adobe does not plan to update any previous version of Adobe products that are out there to be fully compatible with leopard. Sorry sounds harsh, but its the truth. Also, what kind of a mac do you have? What size of HDD, you could install Leopard on one half and use Tiger on the other half.
Does Photoshop require an update to run on Leopard?
Not recent versions. Adobe Photoshop CS3 apparently works fine in testing (as does Photoshop CS2). We did some simple editing with Photoshop CS (8). Photoshop 7 is reported not to run in Leopard.
Like the other threads on this topic that came up recently, I think that it's about time you think about upgrading. How many years old is PS7 now? If not some version of CS, then Photoshop Elements 3 or 4 can be had for about $30-50 and I'd be surprised if there's much in PS7 that is not in them. For that matter, they have several things that are not in PS7.