I'm pretty sure this is new to CS3 (please chime in if you have CS2, because I don't) but you can now open jpegs with Photoshop's Camera Raw plug-in. Camera Raw is essentially what the name suggests, a RAW image processor, built into Photoshop. CS3 now allows us to open jpegs in this neat little editor. You might ask yourself: “Why would I need to use Camera Raw? Why not just edit the image in Photoshop itself?” Well, maybe you don't want to use Camera Raw, but it's nice to know you have the option. Especially if you take a lot of pictures in jpeg format (or your camera doesn't shoot RAW) and you just want to tweak your images without having to apply tons of adjustment layers to get what you want.
Click on Images to enlarge
To enable Camera Raw for jpegs, open preferences (Command/Control + K) and navigate to the File Handling section. Check the box next to “Prefer Adobe Camera Raw for JPEG files.” Notice that it says “Prefer.” For reasons unknown to me, Camera Raw won't open every jpeg you ask it to. Don't ask me why.
Now that you have your image open in Camera Raw, tweak away with ease. It's like all of Photoshop's adjustment options morphed into a slider, and now reside in a sidebar so you can tweak on the fly. Give it a try, and poke around your options.
One of my favorite features of Camera Raw is the “Lens Vignetting.” Play with 2 sliders and get a vignette in seconds, instead of having to fill a layer with black and then start masking to reveal the image. ( vignetting is the darkening of the corners on an image. Typically gives the photo an ‘older' feel. Wikipedia info on vignetting if your interested >>) Once you're done adjusting your image, click “Open Image” and you'll be back in Photoshop.
Like I said earlier, you may or may not want/need to use Camera Raw for jpegs, its just nice to know your options 😉