Posts nav link returns a 404 on category.php

I can’t seem to get the previous posts link to work, I keep getting a 404. The code in its current state is as below:

<div id="posts-list" class="grid_6">
                <h2><?php single_cat_title(); ?></h2>
                <?php
				query_posts($query_string . '&posts_per_page=3');
                if ( have_posts() ) {
                while ( have_posts()) : the_post(); ?>

                  <div class="post">
                      <a href="<?php the_permalink() ?>"><h4><?php the_title_attribute(); ?></h4>
                      Published date: <abbr class="published" title="<?php the_time(__('l, F jS, Y, g:i a', 'example')); ?>"><?php the_time(__('F j, Y', 'example')); ?></abbr></a>
                  </div>
              <?php endwhile; ?>

                <div>
                <?php posts_nav_link(' · ', 'Previous Page', 'Next Page');

				}

				?>

                </div>

            <!-- <div class="alignleft nav"><?php //posts_nav_link('','','&laquo; Previous') ?></div>
            <div class="alignright nav"><?php //posts_nav_link('','Next &raquo;','') ?></div> -->

      </div><!-- POSTS LIST CONTAINER ENDS HERE -->