Tony,
I did the following:
Opened original file with Irfanview 3.98.
Chose 'Image:Information'

Opened original in Photoshop CS2 (opened correctly in portrait mode). Saved as <>_cs2.jpg.
Opened this copy in Irfanview.

My results:
Original file - opened with computer monitor sideways in Irfan 3.98.
Edited file - opened with computer monitor rightways round in Irfan 3.98.

File information in Irfan 3.98-
shows the original at 2048x1536.
shows the edited copy at 1536x2048.
(as does CS2)

Exif data in both files was identical (See attached tab-delimited .txt file).

That leaves this question: what tag does CS2 use to tell orientation that Irfanview 3.98 and iTunes ignore?

-Zeke

EDIT: I got Irfanview 4.1 and had the same orientation results as 3.98 (opened original in landscape, re-saved copy in portrait)