I am trying to add a word to an existing text layer and every time I click the type pointer next to the word I want to edit it just creates a new layer. I have done this fine in Photoshop 7 but not sure what needs to be done in order to do it in CS3?
#1
Click over the existing text to activate edit mode, then take your cursor to the position you want to insert the new text.
#2
Or double click on the T icon in the layers list ... it will highlight the entire text block, and then you can change as needed.
(If there is no T icon in the layers list, then the text has been rendered and is no longer editable.)
#3