it is Windows 7 Home Premium, it happens on everything out of Photoshop now. Nothing on the system is new, we have been running this version of Photoshop, Windows and this printer for years.
I can take a photo that Photoshop gives me the error in and print it out of windows viewer so it appears it is strictly a Photoshop problem. And it it makes a difference this is Photoshop CS5 64 bit. I thought there use to be a 128 bit listed but I dont see it now.