I had no problems with DNG at low ISO opening into CS3 (ACR 4.something).
However...
Shooting test shots indoors in normal household lighting (pushing the limits) using a DA* 16-50mm at f4 (MTF program line), ISO 800 was bad ("worse" than k10d at 1600) and everything higher got worse -- this using Photoshop CS2 and ACR 3.7 (home machine this time).
Comparison swatches attached. Top pair's white balance is "As shot" and all else is flat, 0, no adjustments -- ONLY adjustment to bottom pair is adjusting white balance with the eyedropper.
No in-camera p.p. on either one (NR off, etc). You can see some JPEG artifacts around type, though -- that's all from the composite. Sorry, didn't want to upload a mega-file.
If I get a chance I'll try PEF and see if that makes a difference...