I don't know if
PS 7 had this feature. I think it did. And it's been a while, but if I remember right, PageMaker had issues with transparency if the file was not saved as EPS.
Suggested work flow. (I'm assuming this is for four color process)
1. Save original PSD document as RGB
2. Convert to CMYK
3. Change "Background" layer to "Layer 0" to support the transparency
4. Set the Transparency for the % (typically brochure backgrounds are done at 20% or less depending on the amount of shadow in the photo. Just so it is light enough to read black text over shadow areas)
5. In the
PS HELP menu there is an option to "Export Transparent Image" (I think this is in
PS 7). Use this "wizzard" to generate the EPS file. If going to press, use the "press" option. At the EPS Options screen, choose a Preview (Mac is typically Macintosh 8bits/pixel) and check "Include Transfer Function".
6. Place the file in PM.