Photoshop CS 2 Work Area Colour Bug?

This is driving me nuts!

When i open a psd or jpeg in PS, its like it reduces the contrast and saturation for the file in the work area, yet it saves at the correct levels.

At first i altered an image till it was correct then thought PS was saving oversaturated images. But for example if im working on an image then bring up Save for Web i can see it the correct colout there.

Any ideas?