Photoshop causing other programs not receive ESC key
Photoshop CS4 and ATI Catalyst Control Center both hook the Escape key. To fix it, use Windows Task Manager to terminate ccc.exe and restart Photoshop.
Intel chipset users should right-click on Intel Graphics tray icon and disable hotkeys.
Other way to do this (if Intel Graphics tray icon missing):
Control panel → Display → Change display settings → Advanced settings → tab "Intel® Graphics and Media control panel" → button "Graphics Propertries" → Options and Support → Hot Key functionality → uncheck "Enable"
From here http://forums.adobe.com/message/1636488#1636488
It's a issue with the Photoshop and it happens on other programs too. (It's probably related to some Photoshops plugins) You should be able to use SHIFT+ESC to bypass it.
This issue is fixed in CS5.
You could also try one of these programs from here http://forums.adobe.com/message/1636461#1636461 if you are not happy with the SHIFT-method or upgrading to CS5.
The problem wasn't related to any other software in my case.
This is what helped me (Win 7 Professional x64, had no such problem with Win 7 Professional x86).
Run CS3 - esc did not work. Run CS3 in compatiblity mode with WinXP SP3 - that solved it, but no drag&drop into photoshop (due to different user rights maybe).
I turned off the compatibility mode and the ESC still works as it should :)
EDIT: not TRUE that it wasn't related to any other software. When I was testing it I already had Catalyst Control Center (CCC.exe) shut down from another round of testing. So CCC IS somehow involved in this problem. Simply turning off Keyboard shortcuts in CCC DID NOT work I had to shut it down (in my case via the TaskManager, but I guess normal quit would work the same, ie. not leaving some other part of CCC.exe running).