I'm on a Mac OS 10.5.5 with Photoshop CS4. Command Z does not undo for me... instead it's Command/Option Z that does Undo. When I go into my keyboard shortcuts, it shows Command Z for Undo.... yet Command Z doesn't undo... only Command/Option Z. If I erase Command Z in the keyboard shortcuts window and put Command Z back in... Command C shows up.
Totally crazy making. I have tried resetting my PS preferences and it still does this.

Anybody have an idea how to get Command Z to Undo in this case?