It really depends on your budget and how you'll be using the software. Photoshop is a designer's software suite used not only by photographer's, but also graphic artists and people in multimedia. Personally, I think Abode's Lightroom is a great program for the digital photographer and at close to a third of the cost. If you're interested in HDR imaging you can check out Photomatrix or a similar program which will run you around $100 (putting both below CS3 still). Have you considered simply upgrading to Elements 6?
photoshop is a great tool for photographers, but yes as already stated, it is a bit overkill if on a budjet and there stuff out there that'll do the basic image correction stuff - some free too. and for the record i hated the use of photoshop in the design industry - i only used it for image correction, cropping, creation, etc (what it's supposed to be for ) people actually design stuff and expect to get it printed from the damn thing