I have joomla 1.0.12 and PhpBB3 installed now just installed CB connector. No error msg during installation - now while calling it is giving following error :
Fatal error: Call to undefined function phpbb_hash() in /public_html/components/com_comprofiler/plugin/user/plug_cbconnector/plugins/plug_phpbb3.php on line 516
Assuming the Forum Path is set correctly it looks likely that you have an older phpbb3 version. This should be used with RC7 or newer... Around RC5 or 6 they modified the password encryption and added the phpbb_hash function.
Today I have installed anew phpBB3-RC8, as you suggested. Now the earlier error is gone - I could synchronize already created users in CB & phpBB.
Following error shows when I click any other user, after logging into CB -
Fatal error: Call to a member function session_gc() on a non-object in /public_html/components/com_comprofiler/plugin/user/plug_cbconnector/plugins/plug_phpbb3.php on line 818