Yes, you read it correctly. Today we received our shiny new RH Enterprise release 3 install disks. We discovered very quickly that we are not going to be able to upgrade from RH8 or RH9 to Enterprise Linux r3.
After speaking with someone at RH who had a clue, this functionality will not be available until release 4 of Enterprise Linux.
Hopefully this will save someone else from going into a Godzilla ramage as I did when I found this out.