Photoshop :: Using Empty Level Adjustment In CS3

Operating System:

Windows XP Professional (Service Pack 3)

Software:

Adobe Design Premium CS3 (10.0.1)

Photoshop Lightroom 4.1 and Lightroom 2.0 - on Trial)

For reasons that I cannot fully explain all my images are now opening as "Smart Objects" rather than "Background Layers" in CS3

I have also lost the capacity to "Dodge" (Multiply blend mode) or "Burn" (Screen blend mode)images with empty "Levels" adjustment layers.

I am able to highlight the respective layer and create the empty Levels adjustment layer, change the blend mode to either Multiply or Screen, fill the Layer Mask with Black (Alt & backspace), change the opacity level as desired, select the brush tool and change the foreground colour to white to enable the applicable Dodge or Burn processes.

Unfortunately, it does not function irrespective of the preferred opacity level. The Dodge or Burn feature is static with no effect on the image.

I cannot recall any settings to open all files as Smart Objects in Photoshop CS3 but would welcome some help in identifying such a setting if it exists. Alternatively, I would welcome any other suggested methods of correcting the above difficulties.

Respect to John Beardy for his guidance and suggestions about working differently with the "Smart Objects".

I would, however, welcome some help in regaining the capacity to work effectively with empty "Levels" adjustment layers.