I had this same problem and I found quite a nice way to fix it. I don't reccommend it for a lot of photos though it takes few seconds.
1 open image to print
2 open a NEW file File>New
here you can choose the size of photo you want to print, if you want an 8x10, enter 8x10. I think PS7 has a number of presets already. NOTE- this feature is great for specialty frames, say you need a 2"x3.5" photo.
Make sure you also set your resolution to 150, 300 or whatever.
Now you have a blank frame the size and resolution THAT YOU WANT YOUR FINISHED PRINT TO BE.
3 use the move tool to grab and drop the image you want to print into your new frame.
4 position your photo in the new frame (your printing problem should be very clear at this point if your cameras format is not 2:3, the image doesn't fit right.
5 do whatever scaling or trimming you need to in order get your image to fit in your frame.
6 take a look at your layers, you should have a blank background with your picture layer on top. this provides an unlimited amount of possibilities as far as your border goes.
7 remembering that this new file is 8x10, if you fill your background layer with white and make your photo slightly smaller the white will make your border (or any other color)
now when you go to print you will know exactly what it will look like when your finished. I do this before I do any editing. I open my photo and immediatly put it in a doc the size I'm going to print.
8 with your new border, you can add a drop shadow or glow to your photo layer or you could even use a jagged brush to erase the edges to give a more dramatic effect.
it sounds more difficult than it is., hope this helps