Thanks.

Answer:
Indeed it can, just make sure that you check what ActionScript it is using, I was using the wrong one for a while and wondering why it wouldn’t work, so don't fall into the same trap I did.
Answer:
Yes but flash 8 can't open a cs3 file. Remember which actionscript version as well as some people forget
Answer:
Yes. CS3 can open earlier versions of Flash.
Answer:
Yes but it won't work the other way round

AJ