well I have to say that it's many years that I don't test psp, so I don't know about its recent progresses, btw from what I know by direct experience and talking with other PSP users, there IS a sense in that gap, but you have to be at a very high level (wich I'm not) to appreciate the difference.
If you just want to start, there's no reason to spend that much for photoshop, since you will not use what you have paid for.
BTW I know thare are "limited" versions of photoshop and discount for students.
And photoshop7 isn't muh different than photoshop6 , so if you find the older version at a good price go for it. Forget about version 5 instead.
There also are many free or very cheap programs around the web, and if you are at you first experiences it will probably be better to learn at least some basics with them first, and then try the demos of both PSP and PS before spending too much money.