I'm not 100% positive what you want to happen, so I'll give you two answers and hope one of them hits its mark.
If you want files ending in .php3 to be parsed by PHP 4.1.2 (and therefore treated as PHP 4 files), you should change the top two lines to this new one line:
AddType application/x-httpd-php .php3
And then restart Apache by entering "sudo apachectl restart" in Terminal.
Right now, Apache is trying to run these files under PHP 3, which isn't installed.
This is what I think you want. There is also a smaller chance that you actually want PHP 3 to execute these files. It seems unlikely because PHP 3 is very old and obsolete. If that's so, however, you're out of luck. You cannot run PHP 3 on your Macintosh. You should consider porting the files to PHP 4. See http://us4.php.net/manual/en/migration4.php for more details.