When I use the magic wand in Photoshop CS5, it selects the entire image, not just the section I'm hovering over. I'm working in a Windows environment.
I found that by changing the color mode to RGB, the tool works properly, but I do need to be able to use the tool in CMYK.
Try resetting the magic wand tool by right clicking on the magic wand icon in the tool options bar and choosing reset tool.
Also check what the sample size is set for the eyedropper tool (that effects the magic wand)
You probably want one of the first three settings.
Very last button, under the 2 color boxes "Edit in Quick Mask/Edit in Standard Mode". Standard Mode needs to be checked. I finally figured it out. It happens if you accidently press "Q".