direct selection tool not showing anchors illustrator CS3, Mac 10.5.8, MBP 2.6 GHz

With the direct selection tool (white arrrow) moving over an anchor they show up, but even if the anchor is selected the anchor blue box disappears as soon as the mouse moves away, so its impossible to select a handle.  I can still move an anchor, but its hard to select two anchors to joint the paths etc., sort of like driving blind.  If I click on a path, then hold down the command key, the hollow box anchors show up and the cursor changes into the selection tool.  The hollow boxes show up on selecting using the selection tool (black arrow).  I am pretty direct selection tool was working correctly last week (am an occasional user).

I've know the difference between the select tool, direct selection tool, and group selection tool.   I think this happened a year ago and deleting a preference file helped.  I, quit illustrator,  deleted "com.adobe.illustrator.plist" in my user library, and tried again.  that didn't help.