[AQ]

I forgot to say you can do this in a more visual way using the crop tool. in CS2 and CS3 at least.

Drag a horizontal guide out of the top ruler and set it on some part of the horizon. If the rulers are not visible hit Control R. Then pick the crop tool and select the whole image. Position the cursor just outside one of the corners of the image and it will change to a bent arrow, Drag this and it will rotate the whole image and you can align the horizon with the guide line you have set up.