PS 7 no longer opens the fourth channel in a Targa file as an alpha channel. It loads the fourth channel as transparency, which is the correct method according to the targa file specification. The data in the fourth channel is unchanged, and still available, but appears in a different place and is used slightly differently.
Also in PS 7, alpha channels are not saved with Targa - transparency is saved instead.
If your workflow requires you to use an arbitrary alpha channel instead of transparency, you can download an alpha channel version of the targa plug-in from here:
It is located in the Photoshop folder>Plug Ins>File Format>Targa.