If you are not prepared to upgrade your Photoshop 7, DO NOT UPGRADE TO LEOPARD.
Photoshop 7 and OS 10.5.x (Leopard) are not compatible. When Adobe released Photoshop 7 in 2001 as a Universal Binary for OS9 and OSX they had no idea that Apple would be switching to an Intel chip in 2006. As the release of Leopard is also the end of the Classic environment, this may be the reason Photoshop 7 does not work in Leopard.
As of the release of CS4, Photoshop 7 can no longer be used as a path to upgrade Photoshop. A full version has to be bought now. But Photoshop CS or later can still be used as an upgrade to Photoshop CS4.
It is recommended that Photoshop 7 owners still looking to save money on upgrades stay away from eBay, as, unfortunately, much of the software listed is pirated or misrepresented and you will still not be able to upgrade to CS4.