Hi. I still use CS3 (sorry!) and just bought a new machine running Lion. (Note: It's a MacBookAir and both PS and LR scream on it!)
I transferred CS3 over using Migration Assistant. Seems to work fine, except the separate words in the Text Tool get run together, i.e. it does not support spaces between words. Could this just be a "Preferences" item somewhere? Seems similar to the ol' HTML issue, except HTML even allows you for one space between words. On PS, I get none.