Video Editing is memory intensive. Each pixel and frame in the video has to be stored and retrieved fast. I would recommend 4-8GB of Ram. DDR2 would be the best choice.
Photoshop is require as much...
PS 7 is one of the older versions of Photoshop, before Adobe's merger with Macromedia. Photoshop CS4 is the current version of Photoshop (soon to be replaced with CS5 this summer). While the two have...
CS4 Extended is the legal version that you must buy. CS4 Portable is a free, illegal version that does all the same things as CS4 Extended, the only difference is that you can't add plug-ins
If you are a normal user then any version is good. If you already have an older version and you are a normal average user then its hard to justify the $700 of CS4 (the upgrades start at about $200).