Putting CS3 on two machines is not exactly the truth. The idea behind Adobe allowing the software to be installed on two machines is only if both machines are used by the main person. They allow use on two machines for the purposes of a desktop and laptop machine and the main user has to be the same person and both machines can not be used at the same time. Read the licensing carefully.
Also CS4 will most be coming out in a couple months. When this comes out, Adobe will only be allowing udgrade pricing from the previous two versions (possibily previous 3 version to get it back to the original CS) . So if you have Photoshop 7 you will not be able to upgrade to CS4.
Also, Adobe offered free upgrade if you buy the previous version up to 90 days prior to the release of the new upgrade. Not sure exactly when release of CS 4 comes out but you might want to check the Adobe User forums and keep an out for info for the release. If you buy the CS3 Suite within that time period, Adobe will ship you a free CS4 upgrade.