> socket.error: (98, 'Address already in use')


means that tinyERP-server (regardless what version) is already running on this 
machine with this port (I suppose you didn't change the port). If you want to 
start your rc3 you have to first shut down the rc2 If your on a linux machine, 
do a "ps -aux", search for the PID number of the tinyERP-server and kill it 
(kill PID). Then you can start your rc3.

Your client is connecting, but it's connected to the old version.

knerz





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