Ahhh ok. We are both talking about the same sRGB. Since it is an international standard it has an IEC number attached to it. That should be your RGB Working Space! And it doesn't matter which profile you apply in Lightroom as long as it looks right to you!
Currently the way you have set it up guarantees you will have hassles opening every file so let met explain the dialogue to you.
- Currently you can see Monitor RGB - Spyder2express. Ignoring that it's selected as the RGB working space for the moment, the fact that it says Spyder2express after it means that Photoshop has figured out that your screen has a colour profile called Spyder2express associated with it (from a calibration unit right?) and has loaded that into photoshop. This doesn't need to be selected, it just needs to exist.
- Working Spaces are the default profiles loaded in photoshop to edit files. They are what photoshop expects when you open any picture be it RGB CMYK or Greyscale. They define how red the colour RGB(255,0,0) is in the file itself, and not how red it should make that appear on the monitor (photoshop handles the monitor automatically). If you set Monitor RGB to one of these you are going to have problems since no image should ever have MonitorRGB as it's profile. Remember Photoshop will take care of the monitor display by itself regardless of what the image space is. Set the RGB space to "sRGB IEC61966-2.1" This is the standard colour space for all applications that don't understand colour management, and all your images should ALWAYS be saved in this format so you may as well work in it. (exceptions mentioned below).
- Colour Management Policies should never be off! These define the behaviour of photoshop when it loads an image. It should either be "convert to working profile" , which is what I recommend since the working profile will be sRGB. So right from the start photoshop will make sure that the file is in a format that is a standard. Or if you know what you are doing you can select "preserve embedded profile" in which case it will load the working space out of the JPEG file assuming it is in there to begin with. I'll talk about this below. Regardless of which you pick, leave Ask When Opening ticked just so you have the option anyway.
What this does:
- Photoshop clearly knows your screen profile, ignore it.
- Photoshop uses sRGB as it's working space.
- Photoshop checks each file you open to see if it is in the correct working space. If the file is in sRGB then all things are good, and it will open. If the file is not in sRGB (like AdobeRGB or ProPhoto) then it will bring up a dialogue asking if you wish to convert to working profile (default) which should be done if the final destination for photos is anything other than a very very high-end printer. Or if you want to preserve embedded profiles.
Additionally, to reduce as many headaches as possible, in Lightroom you can set it to export in sRGB when editing in Photoshop which I also recommend.
Ok two exceptions to this rule:
1. If you take a screenshot in windows. It is best to create a new file and click Edit -> Assign Profile and assign the monitor profile. The source of the screenshot is your screen so the profile should be that too. This is the only time your monitor profile should ever be your working profile, and the first step after pasting should be clicking Edit -> Convert to Profile, and set it to sRGB.
2. Some very high end printers such as those with CMYKRGBlBk colours or high end pro printing shops (not your Walmart variety) can print out colours that are richer than the sRGB space provides. In this case if you are after the absolute cream (and you have a picture that is rich enough to make it worth while of which I have seen VERY few) then you should probably export from Lightroom in AdobeRGB (which is the format the printing company will often require but they will tell you this). Then in Photoshop select preserve embedded profile in the dialogue which pops up when opening. This changes the working profile to the larger AdobeRGB (only for this image).
Mind you even an image that's as saturated and colourful as
http://farm4.static.flickr.com/3234/2409418319_05b75a5112.jpg still looks perfectly good in sRGB (because it currently is).
I hope that explains everything a bit better.