Personally, 3E was great. Fantastic, even. And then the PCs started leveling up. After level 13 (around there) and a few splatbooks/d20-books it became increasingly difficult to assemble encounters and NPCs. It took longer and longer and became very draining. I'm one of those people who get an idea and I like to run with it and even with an NPC that I was dying to play, by the time I worked out his Skill bonuses, Synergy bonuses, adjustments from magical items, feats, worrying about which effects stacked and when, blah, blah, blah, I was just done. It really became a pain. So, I ended up making a basic NPC type and then I made up the rest as I went along without my players knowing.

It's all I had time for and it saved me. I was able to scribble down my core concept and then just used the base stats and added +1 to +10 to everything as I felt like it on the spot. It was a lot of improv, but more fun and those games went much smoother.
By that time we weren't even really playing 3E anymore. Worrying about stacking magical items, which Feats could be used to do what and when, and all the stuff out there, the games broke down into rules lawyering binge sessions where everyone had an opinion and no one could agree and everything ended up in a stalemate that I had to break. No one had a problem with that, but it became tiresome.
Still, it took some time for it all to add up. We ended up switching to some other games, like d20 Modern with a de-emphasis on Grapple rules and Attacks of Opportunity (dropped them and stopped using minis at all) and the fun level increased quite a bit. As I've said before, it was my group that told me of 4E coming out and they're excited as Hell about it. Most have either mothballed their 3E books or given them away.
This is all just personal experience, though, so YMMV. The game played very well at around level 7 or so. And the rules themselves were light years beyond 2E. I don't think 4E will be anywhere as far ahead of 3E as 3E was of 2E, but it seems to be going back to basics, so to speak, enough for me to really want to play. A lot of what they're doing is inspiring, from a story-standpoint, and having new abilities on old monsters will surprise my PCs and really help with their sense of wonder and mystery.
For me, 3E had its sense of wonder and mystery sanitized with antibacterial soap and laid bare. Everything was classified and detailed to the point that I felt like I was doing my taxes. It gave me tools, yes, but at the same time destroyed any interest in using them. Hell, my group asked for (and we started) one of our old Rolemaster campaigns up again rather than continue playing 3E. I never really got to play 3.5, as were were playing other things at that time. Maybe 3.5 fixed a lot of things that I remember being problems.