I work with 7 but some say that 4 is more convenient to work. It depends on what you need to create, or how deep you need your design. There are probably more profound functions in 7 than in 4 Again this is a comfortable and interested practice. I recommend to use the software you know (do not forget that CS5 really good)
Basically one is a new version and one is an old version of the same software. Photoshop CS4 is essentially Photoshop 11.0 (Adobe decided to stop using the numbers in the name). Obviously a newer version will have more options and features that previous version did not. That's why I suggest you to move ahead with Photoshop CS4.
Adobe Photoshop CS4 is an updated version of 7.0, But now Adobe has launched a new one that's called Adobe Photoshop CC. I would suggest you to use "CC" version. In this Software version you can also have features of 3D designing, means you can design 3D objects and create 3D effect on Photoshop CC itself, no need of AutoCAD or others.
Adobe Photoshop CC 2014 with 9,99$ monthly subscription... also you get Adobe Photoshop Lightroom CC with is pretty good lite alternative if you are just editing photos without doing web logo's, banners or other graphic elements. With Photoshop CC 2014 you also have the latest updates and good Behance integration, photoshop badges in Adobe learning forums. You also can get really good tool for responsive design if you have PSD web page designs you can import them to Adobe Edge Reflow which is beta preview now. There is plenty new features in the new PS CC 2014 that you will like. Also improved Vector capabilities
Adobe photoshop 7 is very old version, photoshop CS4 has newer options and features which are not available on photoshop 7
As others have said, Photoshop 7 is a bit outdated, but handles most functions. If you're on a budget and can find a second-user version it might be a better option than CS4.
I use Photoshop 7 but Photoshop CS4 has newer options and features which are not available on photoshop 7
basic functions in both of programs are the same, but new files with layers and folders displaying not correct
As such Adobe is always updating their Software and Photoshop CS4 is an updated version of Photoshop 7.0. If you are planning to purchase such Software then I would suggest you to move ahead for Adobe Photoshop Creative Clour (CC) as it's the latest version of photoshop launched by Adobe.