There is a bug in Dreamweaver CS3 when creating external style sheets (which—by the way—you should be doing just about every time you’re are using style sheets with few exceptions).
Basically, when you enter the style sheet name in the Save As field, it ends up being named as untitled.css, rather than the name you typed. The good news is that Dreamweaver is consistent in that the link to the style sheet that is created uses untitled.css as well. You can rename untitled.css in the files palette and Dreamweaver will update the links, however, that is an extra step that shouldn’t have to be taken.
Currently, the best solution is to enter the name of the style sheet in the URL field rather than the Save As field. Enter only the name and not the extension (.css). If you add the extension then you will end up with a file named styles.css .css which can be worse than untitled.css. Also, be sure to leave anything that appears in front of untitled in the URL field like dots, slashes, paths, etc.
Figure 1 below shows where to enter the name of the style sheet to avoid this bug.
I am hoping that this will change in an update or patch to Dreamweaver CS3, but this bug has been around for a while and nothing has happened so far. According to other posts, Dreamweaver CS4 has fixed this bug. The question is whether or not Adobe will fix currently broken software or simply expect you to upgrade to their latest version.