As the other poster pointed out, your calibrator sets the monitor profile that it creates as your default and you do not have to do anything.
You would never assign. Assign would be used when you have a file which is not tagged in a particular colorspace and yet you know that it contains say sRGB numbers. Then you would assign sRGB to it. However, this has nothing to do with your monitor profile.
As for the setup under edit/color settings in CS2, that should be set to the RGB colorspace that your file is in.
For instance, if you at taking your pictures in sRGB (or outputting from a RAW file to sRGB), then you would want to set color settings to "North American General Purpose 2". If you are taking your pictures in Adobe RGB (or outputting from a RAW file to Adobe RGB), then you would want to set colors settings to "North American Prepress 2). In both cases make sure that Color Management Policies are all set to "Preserve Embedded Profile" and that the three little boxes in that section are all checked. If any of them are not checked, then just check them and resave the settings under a new name of your choice, like maybe sRGB or Adobe RGB and then just "Load" the new settings whenever you want to switch from sRGB to Adobe RGB.
Also, make sure that you print through file/print with preview and have it setup correctly to color manage in CS@ and use printer profiles for the printer (you did not say what kind of a printer you have) and that in the Printer Driver that you turn off all color management.
How does this work? I have a new calibrater and have a new profile.
In PSCS2 in the edit mode there is a profile assign option, do I
assign the profile that the calibrater created? Also in edit do I
set the color settings to the new calibrated profile? And or is
there anything in the preferences that need changed? Please help, I
don't understand this!