From Adobe Systems:
When opening images from digital cameras, Adobe Photoshop 7.x reads the ICC color profile and EXIF metadata supplied by the camera to determine which color space it should use to interpret each image. Certain digital cameras do not embed ICC profiles and always specify the sRGB color space in the EXIF data, even though they allow the photographer to use different spaces. As a result, Photoshop behaves as if each image is tagged with an sRGB ICC profile.
Running the utility called Ignore EXIF Color Space will instruct Photoshop 7.x to ignore the color space specified in EXIF metadata. In this mode, Photoshop 7.x will present a dialog box when opening images and will ask which profile it should assign to each image. Photoshop will continue to ignore the EXIF color space setting in files unless Respect EXIF Color Space is run to restore the normal behavior of Photoshop 7.x.