We were thinking about an upgrade to Cs3 (don't really see a huge difference in Cs2 and Cs3), but we don't want to if it will affect how well Lightroom will work with it. I noticed in the export window that it only gave the option to export to Cs2. Will it work with Cs3?

Excuse me.... COMPATIBLITY.... Nothing like trying to sound smart and spelling it wrong! Come on DJ! Can't we get a spell-checker on this thing!!! That's why I'm a photographer and not a speller!

yes it will work and work well as cs3 comes with ACR 4 which is very similar to lightrooms raw converter, so you can make changes in LR or ACR and both will read and write to it.

once installed, cs3 will take over as the default version of PS for LR to go to.

There are quite a few changes with cs3 too

Thanks Corey!