Distort and perspective are greyed out in photoshop cs2

I have placed a photo in a layer and I want to use distort through Edit - Transform, but it is greyed out. I have checked the image I am using and it is saved in RGB 8-bit.
I can scew and warp the picture but I cannot distort it.
See attached image
What is it I have to do to be able to distort this image that is placed into a layer so that it will fit over a template I am using?
Thanks
Nigelinspain

Ok, I think I have sorted it. If I place the image into a new layer and then Rastorize the layer I can then go to Edit - Transform and the Distort and Perspective are now usable.
Phew - that´s got that problem sorted out, now if I could only sort out the economy!

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