I won't get into too many detail with the specs and such since there are practically an infinite number of sources online that showcase the new features and performance of the Hero 3.
I will say that the smaller size and lighter weight makes a HUGE difference in the usability of the video I can record. The following two clips are from GoPros mounted on top of my helmet. The first video is of the new Hero 3. The first part of the clip is of me going under a bridge to show how it transitions from light to dark. The second part of the clip is of me riding on a bumpy road.
The clip below is of me riding in El Tour on a bumpy road (watching a unicyclist) with the Hero 2. While not exactly apples to apples with the first clip (different roads), the two roads are similarly bumpy. You can see and hear the excessive movement of the Hero 2 inside the case in the second clip. I think the lighter weight and smaller size really helped reduce the rattling.
I am really happy in the improvement in footage I can get with the GoPro Hero 3. I plan on using it at the Brompton US Championships in Minneapolis this summer!