Photoshop CS3 viewing photo problem

Hello,

I am having a problem with viewing my pictures in Photoshop. When I open the files, it looks like the contrast is messed up on the photos and they look pixelated. If I open the photos in other programs, the pictures look fine, so I know it is Photoshop. I read somewhere that it might be a problem with my color settings. I am not a pro at Photoshop so I don't want to mess with a bunch of stuff and screw everything up! The current color setting is sRGB IEC61966-2.1 . I changed it to the one that fits my computer screen ( Monitor RDB - Dell S 199WFP ColorProfile ) like someone suggested, but the pictures look dull when I do that! I am not sure which one I should be using or if there was another way to fix the problem. Any suggestions would be greatly appreciated!!

Thanks!