Recently I found a dicussion on Adobe forums where some users were not able to use Photoshop.com services after applying 7.0.3 update.
http://forums.adobe.com/message/2792420
But you need not worry, in case same thing is happening with you. Just follow the steps mentioned below and you should be able to use Photoshop.com services with improved performance:
1. Uninstall PSE 7.0
2. Install it again.
3. You will again see the message for update and continue with download and install.
4. Restart your machine
ALL THE BEST !!!
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