When you first open a LR3 catalog in LR4, you are asked to update the old catalog...it gives you the option of renaming-but I would NOT name it the same and overwrite your old catalog, that would not be a good thing to do. By default I think it takes the name of the old catalog and adds a -2 at the end. So as long as YOU preserve the old LR3 catalog, you can still open that in LR3.
Note, any changes you make in the upgraded catalog can not really be put back into the LR3 catalog. So once you start working, you form a new branch...also, with regards to the LR 4 updated catalog, you'll want to make sure your preferences for that catalog are properly set...I'm not sure an updated catalog inherits the LR3 catalog prefs...and be sure to do a backup!
Jeff, many thanks for insight
So as this is the first I will have updated LR (LR3 was my first) I will have read each dialogue very carefully. If I read your guidance right ~ LR4 gives the choice of updating the old LR3 catalogue the answer should be no but to rename it and by doing so LR4 takes a copy of the catalogue with an LR4 unique name for it. And as such n'er the twain will meet for the two catalogues!
As for the preferences such as its store location these will need to be set as required like in LR3 if you wish to over-ride the default preferences.
Lastly, I did see an online uTube about using virtual copies of PV2010 images being opened in LR4 and when you make changes to use the "Before & After" side by side view in Develop module to see the PV2010 to PV2012 differences ~ made a lot of sense to me as it keeps the original PV2010 version intact and shows readily any changes the PV2012 is making to the PV2010 original.
Just need to order up my upgrade but use the trial period of the download in the meantime...................though that will have to wait as I have a week away on business
Oh, not forgeting to make sure LR4 does not over-write the LR3 installation by default.................but it does sound like it installs naturally into its own root folder???