It works??! I've been using CHDK in my S3IS for a year or more, but gave up on my 8G card. I figured the S3 was simply too old to address cards beyond 4G. More fun ahead.
Thanks, d4005, for bringing up the subject, and to the rest of you for helping him and me!
Yes. Here's what I did:
Using EaseUs Partition Master (free to home users), I erased all existing partitions on the 8G card.
Then I created a FAT16 primary partition (which is also known as FAT12). I'm told that it only needs to be 500KB, but I thought I'd make it a few MB instead - to account for future growth of CHDK. It's a drop in the ocean on an 8G card anyway.
Then in the remaining free space I created a FAT32 partition (7.6GB or so) which should also be primary. I initially made it logical and CHDK failed to switch over to it on bootup in the camera. Converting it to primary (in EPM) fixed that.
Once you've got both partitions created (in EPM) format them, as FAT16 and FAT32 accordingly.
Then you can use SDM to make the FAT16 bootable.
and finally copy BOOTDISK.BIN (or is it DISKBOOT.BIN, I forget) into the root of the FAT16 and you're ready to go.
Flip the lock switch and it will boot and switch over to the big partition in-camera. You'll see 7,xxxMB free in the centre of the screen at the top. This is where I was only seeing 15MB free initially because as I said, I'd left the big partition as "logical" instead of primary.
I'm still missing the CHDK logo on bootup, but I get the red text flash up. I don't have any scripts on it either, but I'll figure out how to get the logo and scripts this weekend I expect

btw, I understand the S3 iS can handle 16GB cards. I'm only using an 8GB with mine because it's all I had spare to allocate to this camera, which if it wasn't for CHDK would remain retired in the cellar

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