Ye gads...
I hope my players never read this but here goes...
I have run two 3e campaigns so far. Both have been run on "Core Rules" with a very few minor additions on a case-by-case basis by myself.
First campaign - I spent tons of time lovingly detailing every monster, every NPC, and every treasure. It was completely balanced by the DMG - the PCs had exactly the amount of treasure and XP they "should." The group loved it.
Second campaign - I have absolutely zero prep time. 100% of opponents stats are made up "on the spot" (I pick an AC and BAB out of the air, maybe throw on some special ability that may or may not correspond to one found in the MM). Opponents' hit points are done on a "let 'em slug away at it until I feel the critter should drop" basis. Treasure is done entirely via Jamis Buck's generators on the fly. XP is handed out by feel with no real bearing on the CRs of the foes defeated (since I'm making up the foes, I figure I may as well make up the CRs). The PCs track the minutiae on each of their characters, but behind my DM's screen, I just have a few sheets of scratch paper that I use for tracking initiative in combat. I fudge Trap DCs. I fudge skill checks. Basically, I fudge everything. The group loves it.
And you know what, I bet they couldn't tell the difference without peeking at my notes.
That tells me how flexible the system is. If I can whip an entire campaign out of my arse and fudge it the whole way - and by knowing the system well enough that the ACs, Hp, and BAB "seem" about right - to the point where the players can't tell the difference, well, hey, that's a flexible system.
I personally prefer to be well-prepared, but I am continually amazed at how little preparation is REALLY needed. If you simply assume that an average creature's AC is 15 plus the PCs' level and give it a special ability or two with a Save DC of about 15 plus the PCs' level, you're in pretty good shape.
In fact, my rule of thumb is now:
A DC or AC of 12+PC level = easy, 15+PC level = normal, 18+PC level = hard, 21+PC level = near-impossible.
An attack/save bonus of PC level - 2 is easy, PC level+1 is normal, PC level +4 is hard, and PC level +7 is near-impossible.
Those two sentences have pretty much gotten me through four months of campaigning so far.
--The Sigil