I have to back up Mr. Schewe. I also followed the instructions to the letter. When I opened the File Formats folder within the Plug-ins folder I did not see a previous version of Camera RAW. I was a bit surprised at this but it just wasn't there. When I dragged the new version in I got no dialog asking my if I wanted to replace a previous version. I still have two Camera Raw versions listed in About Plug-Ins. Sounds weird, but it is the truth. The fact that two of us have the same problem should hint at a bug somewhere.
"When I opened the File Formats folder within the Plug-ins folder I did not see a previous version of Camera RAW. I was a bit surprised at this but it just wasn't there."
And following the IN-CORRECT path,
Program Files\Adobe\Plug-Ins\CS3\File Formats
you would not see the plug in folder because that is not where it would be.
I would suspect that at some previous upgrade, you may have inadvertently forgot to include \COMMON FILES\ in your path and added the upgrade when you got to FILE FORMATS.
"..I got no dialog asking my if I wanted to replace a previous version."
No where in the instructions from Adobe does it state that you will asked this or that there even be a prompt. The instructions do state to "Move the existing Camera Raw.8bi plug-in to another location".
As Mr. Schewe stated, it could only be in the wrong area if YOU placed it there. If it were a bug, others would have had a similar problem, but I don't recall reading any posts about this.