Too Weak, but it Depends
I voted too weak, but that answer needs some qualification.
This same debate is raging ( and I *do* mean raging ) on the WotC boards. And in that raging, a couple of points are getting lost there, so I will try to make them here.
The degree to which the multi-classed character is too weak depends a lot on the campaign where the character is running.
In a combat-heavy campaign, there are more saving throws made, more Spell resistance checks made, more targeted dispel magic checks made, and so on. These are the areas where the multi-class caster suffers more than is balanced (IMHO).
In a campaign where there is more "utility" spellcasting going on, this is less of an issue.
The standard designs of monsters, and their CRs, are geared around the "assumed normal party" : 1 each of single-classed Fighter, Wizard or Sorcerer, Cleric, and Rogue.
What that means is this: the monster designs (including their save bonuses and SR) are geared around a single-classed spellcaster delivering spells at it.
Nobody disputes that the multi-classed character's spells should be weaker than the single-classed spellcaster's. A fireball lobbed by a 10 wizard/ 10 something-else *should* be weaker than that of a 20 wizard.
Nobody disputes that the multi-classed character gains some powerful augmentation from the combination of spells and the other class' abilities. A 10 wizard/10 Fighter has a better BAB and Fort Save than a 20 wizard.
However, *all* classes benefit from improved saves and improving BAB. They all stack, for a composite ability that increases with the character's level. The Wizard's BAB does not rise as fast as the Fighter's, nor should it -- but it does rise. Wizards get a better Will save than a Fighter, but they still get some increases in Fortitude and Reflex saves.
For all non-spellcasters, these attributes merge well and augment each other. The Fighter who takes some levels of Rogue sacrifice some BAB, hit points, a bonus feat, and Fortitude saves for some extra Reflex saves, more skill points, access to more skills, and some abilities (depending on how many levels).
Spellcasters, however, sacrifice all advancement in what is arguably their primary function: spellcasting.
The Fighter 10/Rogue 10's attacks are not halted at +10 BAB, but the Wizard 10/Rogue 10's spells are halted at 10 Caster level. Yes, the Rog/Wiz has a better chance of delivering his touch spells because he has a better BAB, and he can sneak attack with them... but his opponents will almost always save against them because he is not getting the extra 4 points of save DC from using higher level spells. Or, the creature will just ignore them because the Wiz 10/ Rog 10 will fail to penetrate the Spell Resistance.
Even 3 or 4 levels, in a combat-heavy campaign, is enough to make a serious difference. The lost dice of damage is expected, but the increased likelihood of failing the SR check, and then of the save being made, is a killer "double-whammy".
As it stands now, the multi-classed caster can only be successful in a support role. The more levels spent in another class, the more this is true. If there is a single-classed spellcaster in the party with the multi-classed, the problem is less visible, as the pressure to deliver the heavy artillery effect is taken care of.
A slight multi-class, like 17/3, is less noticeably penalized. But talking about 20th level characters is silly, actually, because it ignores the difficulties of surviving to get there as a multiclass caster. If those 3 levels happen to be 18, 19, and 20, the picture of game play is very different than if they had been levels 6, 12, and 18.
I don't think letting Caster Levels stack is the right fix, by the way... that returns us to the (admittedly evil) case where the multi-class spellcaster is too potent.
One thing I think might work is taking the level effects out of the save DCs for spells ... and out of SR penetration checks. That, of course, would mean that all monster save Bonuses would need to be re-evaluated, as would all monster SR numbers (kind of like they did woth DR for 3.5).
Thanks for the soapbox...