NEF files - no tools, no layers?

I've imported several NEF files into Photoshop 7 through the Nikon software and I can't manipulate the files (I'm using the D70 and 10.2.8). I've tried saving them as .tif and pdf's but still can't use many of the tools, create layers or use many of the filters (they're either grayed out or I get the circle with the slash through it). Am I missing something in the transfer process or is my Nikon software not working properly (I can alter scanned tif files)? Any suggestions?

Thanks,
Tres

Your files are in 16-bit mode. Layers and many filters are not supported in Photoshop 7 in 16-bit mode. Either convert to 8-bit, or upgrade.

even in 16 bit mode in CS you lose a lot of filters etc... on top of that you lose some of the raw functionality in cs with the nikon software

Yes, you need to remove the Nikin plug-ins.