When you drag an image in, you're placing it as a smart object - so you have to commit the transform.
Yes, there is a preference "Place or Drag images as Smart Objects".
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Like Mr.Cox pointed out: Photoshop > Preferences > General > Options > Place or Drag …
The problem I am having is that every single file I open looks like this. Once I click transform (which I have to) the layer no longer allows me to click and edit the layer. I like to re-size my images in relation to the multiple images I place on a document. My previous version of photoshop did not create a transform box with each new file. Does anyone know how can I adjust photoshop so that it doesn't do this. I am using CS5 on a PC.
If the controls still appear after you have unchecked the Preference could it be you have »Show Transform Controls« in the Options Bar for the Mobe Tool?
Could you post a screenshot with the Layers Panel visible?
I like to re-size my images in relation to the multiple images I place on a document.
If there is any chance of repeated transfromations then placing as Smart Objects may be a good idea for you after all.
Once I click transform (which I have to) the layer no longer allows me to click and edit the layer.
What do you mean by »edit« in this case?