CS3 is all I have for PP; that's what I'm using with the D700 and NEF (I only shoot RAW now, no JPEG). I may have had to download an update for the D700 initially, but I'm not sure. My computer (an iMac) "fetches" updates for me at an annoying rate, so it's hard for me to keep track of what happened when.
I use Nikon Transfer to download, set Bridge CS3 as the default program to open and view the thumbnails and then Photoshop CS3 to work the NEF RAW files.
Make sure your copy of Adobe Camera Raw has the latest update (4.6). ACR 4.6 fully supports the D700. 4.6 may be the last update for CS3, ACR. If you don't have 4.6, go to Adobe.com, support, downloads, select Camera Raw (Windows, or Mac), select Camera Raw 4.6 update. Follow their instructions on downloading, and installing.
I've used CS3, ACR 4.6 for my D700 raw files. It works great. When you can budget $200 for Adobe stuff, consider Lightroom 2. It can be bought for about $230 on eBay. Since I got it, I’ve been using it for most of my post. I now go to CS3 only for masks, and detail work.
I won't get CS4, until my next new Nikon (which won't be supported by ACR 4.6). CS3, ACR 4.6, and Lightroom 2 is a very good combination.