Hi neous,
ac2K3 by default is set to ac2k files, you have to change the default to ac2k3 in order to use ac2k3 files on ac2k3. To change the default goto "Tools", "Advanced tab" and then select the appropriate "Default File Format:".
I have updated a few from ac2k to ac2k3. It is not hard make a new ac2k3 empty database and import all ac2k contents in. Or you can use "Tools", "Database Utilities", Convert Database", "To Access 2002 - 2003 File Format".
But as Rural Guy has indicated it should work with no problems as a ac2k file as well.
Robert88