Trust me, deadling with the real discs is just as frustrating. I don't know where they went wrong along the way, but it's a hopeless mess now.
After searching the Adobe forums and finding many users with the same problem, it seemed pretty obvious that Adobe just didn't know what the solution was.
Edit: found the relevant paragraph in the below mentioned Adobe blog:
"In CS3, there were some serious problems that customers faced and the time it took to resolve those issues in customer support made the initial experience with CS3 painful for some customers."
Painful? Oh yes...