Should i uninstall both the Eclipse and MYEclipse IDE and install more recent versions?
Yes, yes and a resounding yes. There have been about 6 new releases of MyEclipse since you last downloaded it. Please go to the Eclipse 3.0.x Downloads area and download MyEclipse 3.8.4.
Also make sure you have uninstalled MyEclipse 2.5.0 completely and it is no where to be found on your system. If you run into any trouble, I highly suggest you redownload Eclipse 3.0.2 SDK and do a clean install of both Eclipse and MyEclipse to a new location WITH a new workspace to minimzie any “cross polination” you might have experienced trying to get MyEclipse 2.5.0 working with Eclipse 3.0.x, which actually should not have even loaded.