If I recall correctly, there were issues with iTunes 4 initially, and some of that was problems with updating pre-existing libraries.
Are you sure that you don't have a Mac that would have already updated that library? Tiger never came with itunes 3. A late version 4 (4.7.1, to be exact) was the version that was originally bundled with Tiger in January 2005. Even Panther (OS X 10.3) came with iTunes 4, and iTunes 4 was first released way back in 2002, when Jaguar (OS X 10.2) was current - long before Tiger...
With that in mind - is it possible that you have used that library with a newer version of iTunes, sometime in that nearly 8 years? That would have naturally updated it, and the updated library can't go back - launching an older version of iTunes would simply create a new library, with no playlists.
When you updated your OS X version during that time (Even iTunes 3 was released long before Panther (OS X 10.3) was released.), then your iTunes version should have also updated to something newer than version 3 - long before now.
Now - to "use the old library with all playlists" - if it still really is an iTunes version 3 library - You should be able to drop the old library on the new iTunes icon, which will import your ALBUMS. I don't know it the playlists will also be imported with that - you would need to try it.
If, in fact, the library, and the playlists, etc, have been updated at some point in the last 8 years (because you ran that library with a newer version of iTunes), then you have your music, but not necessarily any playlists.
Anyway, you'll need to try that. You may need to try several times, using different methods.
So - your first step is to back up your present library to another disk.
Then, try a simple import, by dragging your old library to the iTunes window.
