Though there's little in Photoshop CS3 that you couldn't do before, enhancements to existing tools really streamline production work. These include Smart Filters, which apply the traditional Filters at render, rather than on the bitmap, resulting in nondestructive, re-editable effects; Refine Edge, which groups selection-edge tweaking options in a single dialog with various types of previews; and a Quick Selection tool which speeds up masking against certain types of backgrounds, such as patterns. In addition, enhancements to Bridge CS3, which Adobe bundles with both the standalone applications and suites, finally provide Photoshop with a decent media browser. Adobe updates its 32-bit high-dynamic-range imaging support with enhanced algorithms for its Merge to HDR capability, but it puts all the beefed-up HDR-editing capabilities in the Extended version.
There are, of course, a few new capabilities, though they'll probably be handy for only a limited group of users. You can export images for Zoomify, which deconstructs images into smaller tiles and creates a small Flash movie that you can embed into a Web page, effectively allowing you to zoom in on larger images. And the automatic Photomerge will probably be a hit with panorama constructors.
For users new to image editing, Photoshop's rather monolithic learning curve remains, and you're better off starting with an inexpensive application such as Adobe Photoshop Elements 5 or Corel Paint Shop Pro XI. One of those may be all you need. But if you've been waiting to take the plunge, Adobe Photoshop CS3 is as good as any version to dive into, and if you're a pro considering the upgrade, it's probably worth the $300 or so bucks it will cost you. As for enthusiasts, that difficult decision remains between you and your wallet.