Let me guess PS7 ? or not named properly or .. to many extra alpha channels 
  If it’s Photoshop 7 you need the proper targa plugin extension fix  
 Here is the link for the working .tga plugin 
http://www.adobe.com/support/downlo...544&fileID=1478) 
 1. Make sure Photoshop is not running. 
 2. Download the archive file that contains the Targa plug-in and 
 its associated ReadMe file. 
 3. Use WinZip or PKZIP to extract the contents of the archive file. 
 4. Locate the Photoshop 7.0\Plug-Ins\File Formats folder. 
 5. Drag the extracted Targa plug-in into the File Formats folder. 
 6. In the resulting dialog box, click OK to overwrite the existing 
 Targa plug-in. 
 7. Launch Photoshop 7.0. 
 The Targa Extension that ships with ps7 is faulty and will never save any alpha channel info. Because the game treats the file like 24 bit it will not display your work. 
 # 1 file must be 32 bit .tga with ONE alpha channel
 # 2 the file must be name exactly as the original to override
 # 3 Make sure you only have the one extra alpha channel named *Alpha 1* 
 Fyi I have images with over 90 layers and do NOT flatten them to make my .tga Besides it’s best to keep that master .PSD around for quick edits 
 hope this helps  
 svцsh