Danny, like almost everybody that is current with Lightroom, doesn’t keep up to date with Photoshop. He still uses his CS3. At least, he occasionally uses his Photoshop CS3. I haven’t use Photoshop in more than 2 years.
The current ACR does not work with older Photoshop CS3 or CS4. Like most of us, Danny likes the new processing of the images of the Lightroom 3.x serie. The process 2012 is so much better than the 2003 process of LR1 and LR2.
The question is: How to keep using CS3 but benefit from the new processing since ACR doesn’t support it?
The answer is: Just use:
Edit In >
Edit in Photoshop. Lightroom will recognize that it’s an older version of Photoshop and will offer to convert the photo into either a TIFF or a PSD file with the new process “baked in”.