Well...
Since my last post, I've had CS3 breakdown to the point where it's unusable. Period! I tried everything I could find out from the web, and anywhere else I could, but it would simply give an error message and shutdown whenever I tried to open or save a file.
So, in frustration I decided to uninstall it and go back to CS2.
I fired up CS2 after uninstalling CS3... and wouldn't you know it... CS2 was no better. Same problem in fact (or so it looked). I checked the module name that failed on some the errors... Hmmm "uxtheme.dll" seemed by far the most frequent occurrence. So a bit of research on the web to find out what uxtheme.dll is... It is a file that involved in the "theme" that windows displays on the desktop. I also found some instructions on the web for replacing and changing the uxtheme.dll file - some of which sounded quite dubious.
Just because I can, I decided to try changing the windows theme and see if that has an effect. I chose windows classic (I was running a modified version of windows classic - I had changed some colours and sounds). Well, what do you know, CS2 runs perfectly!
Hmmm, OK, I'm game/silly enough... let's install CS3
again! (I think I've nearly done this enough to be able to describe the process over the phone to a blind person).
Well, suffice to say, so far so good!

I now have CS3 up and running again, and it appears to be behaving. I guess sometime in the past few weeks my uxtheme.dll file was corrupted.
I hope this might save someone from the frustration I have experienced over the last few weeks!

Never mind curses about camels, fleas and armpits... a far worse curse would have to involve photoshop not working!
Al.