Photoshop CS IS Photoshop 8. Adobe is mimicing Macromedia's branding of all their apps last year as they standardized version names to "MX" - e.g. Dreamweaver MX, Flash MX - and they want people to buy their whole "Creative Suite" which promises a lot of interoperability between apps.
An accurate question is what's the difference between PS7 and PS CS and the answer is plenty, foremost the inclusion of the Camera RAW plugin which was a $99 extra before.