I think CS3 extended may be appropriate for working on the images at a frame per frame basis and do things like colour correction/manipulation. To do any basic video editing, you will find it a lot easier to use a specialised program like Premier Pro, Final Cut Pro, Vegas, Avid, Edius etc... Most of these programs have a "lite" version that is a lot cheaper than buying the full package ie Final Cut Express, Premier elements etc...
Just found that I can open /import & export video from my new canon 5D mkII with the extended version of photoshop CS3.
Having never done video editing & correction etc before, does anyone have tips or resources online that they could pass on?