I had the exact same problem. I had created some custom scripts to run under the Batch command. After using those scripts without problems for some months, today after Photoshop CS3 froze, upon rebooting my PC (Win XP SP3) the File > Automate > Batch command showed up greyed out (inaccessible).
Following Mr. Hannaford’s suggestion i believe causes Photoshop CS3 to recreate a new ‘Actions Palette.psp’ file containing the default scripts which ship with Photoshop CS3.
CAUTION:
However, in the process, any other scripts you had created in the ‘Actions Palette.psp’ file you are deleting or renaming prior to restarting Photoshop will be lost (especially if you deleted the file).
In my case, I took the precaution of making a copy of and renaming my ‘Actions Palette.psp’ before deleting that file.
Sure enough, on re-starting Photoshop, the batch command had re-appeared but was only giving the original default set of scripts. All my scripts were ‘lost’ (I wasn’t sure where Photoshop stored the scripts I had created and half hoped that they were stored in a file other than the ‘Actions Palette.psp’ file but I wasn’t surprised.).
A hint as to the cause of the Batch command becoming greyed out in my case was likely due to Photoshop corrupting the ‘Actions Palette.psp’ file. The original one which I copied was only showing a size of 1k before I deleted it. The rebuilt one with the default scripts (per Mr. Hanneford’s instructions) shows a size of 20k (therefore my ‘Actions Palette.psp’ file should have shown a size greater than 20k). So … I wouldn’t have been able to re-construct my scripts in any case from the copy I made.
So, before you delete your ‘Actions Palette.psp’ file, check its size. If it is say 20k or above, it may not be corrupted and the source of your problem may lie elsewhere such as with the preferences which need to be purged.