So, when building a half-dragon kobold, do you just take your CR 1/4 kobold, then add half-dragon (+2), but which has a minimum CR of 3, and jump it up to 3?
Or, do you take you CR 1/4, and add some NPC class levels (kobolds are at NPC class level -3), say warrior 3, which brings it to CR 1, then add the adjustment for the template, giving you a CR 3 kobold with 2 extra warrior levels?
The first suggestion i think.
Since kobolds are a class defined race I would add the class levels and then the template.
If they were defined by racial HD I would say use either method, but keep the party in hime.