Carl Zimmer considers the tension between biological and psychological explanations of the mind (and, perhaps, the soul) in the conclusion to his history of early brain science Soul Made Flesh (ISBN 0099441659, p296):
Our souls are material and yet immaterial: a product of chemistry but also a pulsating network of information – a network that reaches beyond the individual brain to other brains, linked by words, glances, gestures, and other equally immaterial signals, which can leave a mark as indelible on a scan as a stroke or a swig of barium, and yet never become merely physical themselves.
Link to excerpt from Soul Made Flesh.
Mind Hacks 
Hi Vaughn, The classic differentiation between psychological and biological I believe to be irrelevant. Every thought or emotion is a biologic event that is encoded in the basic transmission of chemical messages across the synapse. The differentiation between biological and psychological has its roots in the advent of psychotropic medication which began with the serendipitous observation that patients treated for Tuberculosis with Isoniazid experienced marked improvement in their depression. Thus was born the class of antidepressants called Tricyclic Antidepressants. Unlike Electroconvulsive therapy this discovery created a schism between the Analytic Schools of Psychology ( Freud, Jung and Adler) and the Biologic Schools of Psychopharmacology. This schism has endured much to the detriment of patient care. The reality is that medication is a tool to help patients change their thoughts and behaviors and neuronal associations just like an analytic interpretation in psychotherapy can change these very same neuronal associations. The matter of degree is different but the ultimate benefit a patient receives from a medication can only be solidified if the underlying thinking a patient experiences changes through the repetitive reinforcement we call therapy. This may seem an obvious observation but it is frequently a lost fact when clinicians treat mental illness. The advent of PET scanning research and fMRI make it clear that all thoughts and emotions are chemical and what we who struggle to change human behavior do everyday is reshape years of faulty associations and genetically predisposed patterns of thinking. These are all hard wired chemically associated connections between axons and dendrites that are more fluid then anyone has previously believed and can be tweaked by meds and psychotherapy. So I argue we forget about this biological/psychological schism and reunite in a unified approach to mental illness that incorporates both schools of thought. This reality will be realized through the brain research (PET and fMRI) that is ongoing and conclusively proving the folly of these artificial differentiations. By the way I love your Blog and am a regular reader. Bill Hapworth