Upgrading Indesign from 'Design Premium' CS3 to CS5 - compatibility

I work in-house in marketing; we're looking at upgrading two of our Adobe Design Premium CS3 suites to the CS5 version. We have four or five CS3 suite licenses but can only afford to upgrade two of them at present.
My question is about the InDesign element - do we need to have the CS4 version in order to be able to effectively save down to a version that can be used between InDesign CS3 and CS5?
I'm worried about compatibility internally and externally - we use a lot of freelance designers who mostly use CS5 - this is already causing issues as we cannot open the files they send.
Any tips/hints you can give would be gratefully received!

The ONLY way to get a file from CS5 to open in CS3 is to export from CS5 to.idml, open that in CS4, export from there to .inx, and open that in CS3. Ther esults won't look a whole lot like the original CS5 file, especially if any features were added in CS4 or CS5 have been used, and there may be noticable changes in text flow due to text engine differences between versions.
Working in collaboration across different versions is a lousy workflow.

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