You can most definitely delete your old CS3.
You may run into file association problems but they are fixable.
You should always have 10-20% free space on your hard drives.
Thanks. That's what I'm aiming for!
May I suggest that new disk drives aren't too terribly expensive, and you can get some with absolutely gargantuan storage capacity.
What Noel says. This is an absolute necessity if you only have one drive and, therefore, are running Photoshop's scratch disk on it as well. In that case, you want to have at the very least 200 GB free, but that would be the minimum.
Ideally, you should have a dedicated, physically separate drive for your Photoshop scratch.