Welcome back ... been awhile since we've heard from you!
If you have an FCE 4 upgrade disk, don't even bother installing FCE 3. In fact, it's best to uninistall FCE 3.
Everything you need is on the FCE 4 upgrade disk. When you install from the FCE4 upgrade disk, it will ask you to enter both serial numbers (FCE3 + the FCE4 upgrade s/n) and then will install the entire program. After the installation is done, run Software Update to get the FCE 4.0.1 update. Then you are good to go!
FCE 4 runs fine on Snow Leopard.
The AGP error message you are getting happens when FCE3 or 3.5 is installed on an Intel Mac. Just ESC from the error message, it's not an operational problem.
Thanks for the welcome.
I have Lion 7.1 on my internal HD, but now have FCE 4 running in 10.6.8 on an external HD because it won't ......... hang on a minute. I concluded that FCE would not run in Lion, because my FCE 3 refused to run in Snow Leopard. But the adviced above was to install my FCE 4 upgrade directly in Snow Leopard. So perhaps that might work in Lion as well..... 45 minutes later, it does! I have FCE 4 running in Lion. Thanks folks.
BTW, the gorgeous colours and wide screen of the new iMac is a real treat compared to my seven-year old 4 x 3 screen.