First, I'm not on Premiere CS3... still on 2.0 But I'm almost certain that rendering the timeline prior to any export is not necessary.
The only reason I'm responding to this is because I have projects in PPro 2.0 that require me to pre-render things "piecemeal" just like you prior to an export. Sometimes I have to do it in 5 second chunks just to keep it from crashing - very frustrating and takes forever.
These "pieces" you have to pre-render first though... are there any effects on the footage beyond the stock effects that come with Premiere? The reason I ask is because I'm trying to figure out if my problem is related to certain 3rd party effects like Boris Continuum or Saphire. I can't seem to narrow it down.
One thing I've found in PPro 2.0 that helps though is if you quit, reboot, load the project again then immediately start to export. It will usually finish without errors. This leads me to believe there are memory "quirks" in Premiere (at least version 2.0 that is).
If these things are still happening in CS3 though, this pretty much takes care of any rationale to upgrade for me.