Hardware/Software Expertise about Scanners

I have some questions about Scanners (both Hardware and Software related) and I'm looking for some expert advice. I'll try to provide as much information, as briefly as possible, and ask specific questions.

I was previously working with the old Photoshop CS on a 9-year old computer running Windows XP with a CanoScan LiDE 80 Flatbed Scanner. I typically scanned painted/digital artwork and line art and worked in 1,200 DPI resolution (both in color and grayscale), using Photoshop's TWAIN drivers to run and operate my scanner manually (selecting features, resolution, etc).

I have a new computer now with Windows 7 in 64-bit and Photoshop CS 5. I've no way to use my old scanner (even via a VM), so I looked into purchasing a new scanner.

The Problem:
Photoshop CS 5 no longer supports TWAIN and I've discovered through trial and error that the Canon software bundled with new scanners will not enable me to perform scans above 600 DPI. Further, the formats are limited and I need to be able to scan in lossless formats (previously I was scanning straight into .PSD format for Photoshop, which is now not an option).

Basically, I need the run down on how modern scanning works and what scanner can suit my needs. I was just using TWAIN drivers and an old version of Photoshop to do my high res scanning, but now it appears the process has completely changed. I need:

A reasonably priced scanner capable of at least 1,200 DPI scans (both hardware capable AND software capable)
The ability to scan both color and grayscale
The ability to choose formats (preferably .PSD or some other lossless format).

Any help is appreciated.
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More about hardware software expertise scanners
  1. Here is more information about using TWAIN with CS5: http://kb2.adobe.com/cps/405/kb405072.html

    I think the option of using your scanner software and saving as TIFF will do what you want.
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