Image Types

Is there a way to convert the image type of a pic so you can work with it in PS7? I saved this image and it when I open it in photoshop it won't let me do anything. When I try to save it under another type, it doesn't give me JPEG, only PSD, GIF, etc. and when I save it as something else it still doesn't work. TIA.

ETA: Thanks to everyone that helped, I used neke's method. :)