Zounds! That's 10 year old software you're working with there, Henry. What operating system are you working on?
Also, version 3 was so troublesome that Adobe release a major patch for it so, if and when you do get it running, be sure to update to version 3.04.
Operating systems have changed quite a bit since then. Later versions of Windows may or may not support it.
Did this software ever work on your current computer operating system?
The rationale behind the 3.0.2 Update appears to be primarily for its compatibility for the then new Windows Vista. The link for the update and its Adobe's reason for its being are in the following
Note that the update is 3.0.2 not 3.0.4. There is no 3.0.4 Update for Premiere Elements 3. Did you ever get to the install of 3.0.2 Update?
What are the details behind....
a. You had been running your program until now and all of a sudden you cannot open it except to the Error 400 message?
b. You newly acquired Premiere Elements 3 and are trying to get it up and running? What computer operating system is involved today.
When do you get the Error 400, before or after the install? And, then when?
Yes, you're right. The update is to version 3.02.
However, although ostensibly the update was make the program compatible with Vista, the reality was that, in its original release, version 3.0 had all kinds of stability and performance issues -- as did version 8 until Adobe patched it.
Depending on the operating system the user is running, an update to at least version 11 would likely solve a multitude of problems -- and an update to version 11, since it's a couple of years old, could have had at very little cost.
My further comments will await more details from you on the specifics of your situation. But, my first impression is that your issue is more than just an old version issue. I say that because I can still install and run Premiere Elements 2.0 on Windows 10 64 bit - no Error 400. But the answers will be in the details.
I can't recall what the issues were, but the 3.0.2 update did fix some problems for me when I was running it on Windows XP.