Calimer from the Doom3 LMS Mod Team sent us an email with an explanation as to why some people might be experiencing problems with their beta3 and the latest 1.2 patch:
We have been getting a lot of attention from LMS Coop fans who are upset that they can't play LMS with the 1.2 patch installed. Unfortunately, for Beta 0.3 the 1.1 patch is required and there is not much we can do about that since a 1.2 SDK is not out. However, I don't think it will be long until there is an SDK out and if that makes it out before 0.4 release is ready then we'll get a version 0.35 out the door ASAP so that you ROE fans can play LMS Coop as well. As a note the 0.4 release is going to be almost completely about map polishing and improvement. We really want to make sure that you the players have the most fun and thrilling experience that we can create.