I'm sure that the image is indeed photoshopped to some extent, but I am pretty sure that the majority of the 'wrinkle removal' is due to a huge amount of lighting. As sort of evidence of that, I'll point to her pupils...which are very very very small. this only happens when someone's eyes are exposed to bright light.(although some drugs may have that effect as well????)
its amazing what you can achieve with lighting! when I was in highschool, I did a shoot with a girl who had horrendous acne, and I didnt even know what photoshop was back then - I used a ton of well placed lighting, and her skin looked immaculate....she was so happy with the pictures she cried!
however, I do agree that on magazine covers, photo-shopping goes to far.... It's depressing that they feel the need to remove all of the distinctive and human features of models and celebrities, ie wrinkles, moles, etcetera....these features are often what make people beautifull and interesting! I have always wished that I had freckles...
edit: holy spelling errors, batman...I must be tired, woops.