I downloaded the trial for CS3. It loads without any problem, but "encounters an error" and closes when I try to open a file.

Brand new Pentium Dual-Core system with XP2, 2G.

I've seen a couple of items on Google about this, but nothing definitive.

What exactly is the error?

I'm running and Athlon 64 with 2gb and when I tried CS3 it was fine.
Is it possible that it did not install properly?

Literally "encountered an error and has to close." I can see the error dump, but that's not very helpful. There are similar reports online, but again, nothing I can pin down.

I even installed a friend's copy of CS3 Design Premium to see - everything except Photoshop runs fine.