This depends on the group's play style. The default assumption in 4e and 3.5e encounter design (as described in the books) is that encounters are "balanced" to a certain degree. OTOH, in your typical old-school sandbox style play, the assumption is that there are no assumptions; 1st level PCs might stumble on a nest of baby kobolds, or they might stumble upon Orcus.
I don't own the 3.5 DMG. Did encounter design change from 3.0 to 3.5?