I have Photoshop Elements Version 2 which will only produce a slideshow in PDF format which can only be played on a PC so Version 3 sounds as it is the same.
I also have Photoshop Album Version 1 which is much better (for slideshows) and will produce a Video CD for showing on TV.
I rather think that the latest Photoshop Elements Version 4 will incorporate Video CD option but it costs £59
There is a Photoshop Album Version 2 which is reasonably priced.
Hope this helps