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There's just enough that's better in the CS4 updates to Photoshop and Photoshop Extended--most notably, usability improvements for core features--that many people will find themselves sighing, biting the bullet, and upgrading. If you work with video or 3D, or want to update your Creative Suite to CS4 for other reasons, this is a no-brainer; for the rest of us, there's little you can do with CS4 that you couldn't do with CS3, and the latter seems a bit faster and more memory efficient in some respects.
The Web abounds with complaints about Adobe's installer and updater, and I think most are quite justified. Every Windows application installer suggests you close any running applications, but you can usually ignore it and 99 percent of the time everything works out fine. Adobe forces you to close your browser and all Microsoft Office applications, because many of the programs in the suite--primarily Acrobat--spread octopus-like tentacles throughout your working environment. That's pretty appalling in and of itself, but in addition to wasting a large chunk of time installing, you can't do anything else but play Solitaire while it's happening. And as before with the updater, you'll get to relive this delightful close-your-apps-or-else experience on a regular basis. Even as I type it's stopped dead waiting for me to close Firefox. Plus, the installation "progress" bar bears no relation to reality whatsoever, with its two steps forward and one step back movement. Over and over again. All of this adds up to a one-point demerit for Adobe on its Setup and Interface rating.
In some ways this version feels like a necessary evil. Adobe has obviously put a lot of work into it, but most of it is under the hood--way under the hood from the perspective of the everyday user. The entire 3D engine (in Extended) has been migrated from a PDF-based architecture to OpenGL, and the company has seeded OpenGL support throughout the application. The panels architecture is now extensible via Flash, allowing people to create their own panels or modify some of the existing ones (you can try it yourself using Adobe Configurator). And via the release of the Pixel Bender SDK, the filter library is not only extensible but has baked-in GPU and multicore acceleration. All of this is essential in order to allow future versions of Photoshop to evolve. However, the move to support 64-bit Windows, and multitouch inputs and 16-bit printing on the Mac are likely the real technology changes that will significantly impact everyday users of this version.
Photoshop CS4 Extended users will benefit more immediately from these underlying changes than Standard users. For the latter, OpenGL support primarily manifests itself as some whizzy screen zooming and rotation tools that demo well but likely won't get used much. However, Adobe has greatly improved Extended's 3D support. It now offers most of the essential render settings and view controls, plus the ability to create primitives (and extend the library of primitives), necessary to work with 3D models. You edit and paint on textures simply by double-clicking on them in the Layers palette, then see your changes applied when you toggle back to the model; not quite real-time, interactive painting, but close enough for now. And now there's basic keyframe animation for 3D scenes. Still there's room for improvement: it needs better lighting handling and the ability to tile and more easily position textures, and several aspects of the interface, like the Rendering options, are still far too dialog-driven. And Photoshop gets very slow when you load (or generate via the Mesh from grayscale command) relatively complex models with tens of thousands of polygons.
That mixture of real-time and dialog-driven action still permeates the interface of Photoshop in general, despite some advances. For example, if you use Photoshop for Web or print production work, the move to modeless Adjustment and Masks panels for real-time adjustments to preview changes in mask feathering and density is potentially a huge time-saver. But all the ancillary operations, such as the Radius, Contrast, Smooth, (another) Feather, and Contract/Expand parameters controlled by Refine Mask, remain in a modal dialog box.
So while there are a few tweaks, such as the new tabbed windows (you can still float 'em, though) and jarring all-caps text, long-time users won't encounter a lot of user interface differences to slow down their work flow. On the upside, tool shortcut keys now behave in what Adobe refers to as a "spring loaded" fashion. That means that if you hold down the shortcut key for one tool while another is selected in the toolbar, it temporarily overrides the toolbar until you release the key. Very nice. On the other hand, I don't particularly like the icon representations of the adjustments in the new panel--you can't tell what they are without mousing over them and reading the text--but you can just ignore them and use the adjustment layer pop-up on the Layers palette as always.
Aside from the real-time adjustments, there's not a lot new here for Photoshop's core photo-editing audience. Adobe Camera Raw is now up to version 5.x, and has been brought more into sync with the way Lightroom handles files. It includes local retouching brushes like that application, though I suspect the quick fixes for which they're intended are less important when opening in Photoshop than in Lightroom. And now that you've trained yourself not to use Dodge, Burn, and Sponge--because they've worked so poorly for the last 10- plus versions--Adobe has fixed them, by limiting the areas of the tonal range they apply to. The Vibrance control, a saturation adjustment that preserves skin tones and which has made it into all the other Adobe photo applications, finally comes to Photoshop as well. Also useful (some might say overdue), the Clone Stamp and Healing brushes now display a preview of what it will be stamping or healing, and brush size in general is now interactive.