You shouldn't have to manually flatten anything to perform these funcitons -- Illustrator will handle any necessary flattening when these export functions are done.
To create a PDF file, choose File > Save As and then choose PDF for the File Format. If this is going to a printer, I'd suggest you choose the PDF/X-1a preset.
To create an Illustrator CS3 file, choose File > Save As and then choose Native Illustrator (AI) for the file format. In the next dialog, choose Illustrator CS3 as the compatible version.
To create a Photoshop PSD file, choose File > Export and then choose Photoshop (PSD) for the File Format. Make sure you choose a high enough resolution (300ppi should be fine).
I think that is what I did. The printer said my background layer was not attached. I know from school to do a pdf and I just leave it on the default, since I don't know what all those mean yet. I think with one of the files I sent it was a cs4 instead of cs3. Later I noticed their requirements were cs3 version. I don't know if that it what caused the background to disappear or not. I need to resend it and see if that is corrected with choosing cs3.
Thanks for your response. I will attempt to send it again.
I am also having an issue of not being able to open a cs4 ai file at school. If I save it as a cs4 pdf, it will open, but it won't open if I save a cs4 ai on my thumb drive. Any ideas on that?
perhaps the other issue was that they asked for a pdf, so I saved as a pdf instead of saving as an ai for cs3. Though when I do it that way for cs4 version, I can't open it. It only opens if I choose pdf instead of ai in the first window. I never had issues with cs4 at school, just cs5 files saved at home to use elsewhere