There are various solutions reported around the web for this, where CS3 throws a "'could not complete your request because it is not a valid photoshop document'" at you.

However, simplest solution is to simple navigate to an image it can open, easiest done by selecting the view type of thumbnails in the open window, then when it sees one it can open, open it, then go back to your file you couldn't open and lo and behold it opens.

Very bizarre behaviour, but a simple quick fix...