Edit-->Transform function Perspective is greyed

[Guest]

I am trying to fit a small PNG image into a bigger JPG image.

To do it properly I need to distort PNG with the Perspective function so that it fits precicely into where I need it.

In my Adobe Photoshop CS3 Extended Version 10.0 I created a new file, drugged the JPG onto the existing layer.

Then added another layer and using File-->Place placed my PNG there.

However in Edit-->Transform function Perspective is greyed:

When I work just with a single layer with this same PNG in it, Perpective is available and works.

What am I doing wrong and how do I get round it?

[Mylenium]

You haven't yet finished placing your file as a layer. Your image still shows the Place box, not the regular transform box.

Mylenium

[Guest]

U mean I have not press ENTER after placing - actially I did. Repeated several times with no joy.

But I have just managed to sort this out by doing Rasterize Smart Object.

What exactly does is mean?

I thought the JPG and PNG are already raster objects, and to distort  it is better to vectorize them. At least this way it works in FLASH.