Photoshop 7.0 will work splendidly....I have Photoshop 5.0 and 7.0 and use both...5 mainly for panel lines, 7 for paint and insignia placement.
Not sure what programs you used for CFS1, but the big one for CFS2, FS2002, FS2004 is Martin Wright's DXTbmp. It is a freeware program that converted the extended bmp format texture files into normal 24 bit Windows bmps so that they can be opened in paint/photo editor programs....then convert the files from 24 bit back into extended bmp format for use in the sim. I don't have the website address at hand, but if you do a Google search for Martin Wright DXTbmp, it will be the first one on the list....brightnet something or other or something or other brightnet. Make sure to grab the dll package while on Martin's site...you will need it to get any of his software to work.
OBIO