Simply awesome experience, but not without its flaws.
First off, the setlist is great, no matter who you are, you are bound to find at least a couple appealing songs for you, whether you are a classic 60s rocker, a 70s hippie, an 80s metalhead, there's something for you, and unlike say, Warriors of Rock, it doesn't feel out of place, it all comes together nicely and feels very natural.
Also, the new drop-in/drop-out options are great, they make the game a lot easier to pick up and play, you can change the difficulty at any time, even in the middle of a song, and if you think you won't be able to nail the upcoming solo, you can just turn on 'No fail' mode. Again, all of this can be done at any time, so the game is accessible to just about everyone.
Art style has been upgraded, textures look better, the annoying grainy filter has been downgraded, the framerate has been improved, and the menu navigation is easier than ever. I haven't really got the chance to try out the keyboard, vocal harmonies, or pro modes, but by the looks of it, they must be pretty damn awesome.
However, I have my share of issues with the game, and while they're definitively not game killers, to someone like me, who lingers on the border of obsessive-compulsiveness, they might be very, very annoying... so now be prepared for some heavy nitpicking.
Character Creation in Rock Band 2 was great, it didn't gave you as many options as I wished, but it got the job done, and I was hoping that it would be greatly improved in Rock Band 3, specially if you're like me and liked to turn on the 'No fail' and 'Performance' modes and just enjoy the music and watch your characters rock. Sadly, Rock Band 3 really disappointed me on that. One of the issues I had with the Character Creation in RB2, was that nearly all clothing was either studded, shredded, or dirty, you couldn't make many normally dressed characters, and while RB3 adds some more clothing options that are more casual, the majority of it is recycled content... now I could have lived with that if it wasn't for the horrible body proportions. Male characters have abnormally long torsos and amazingly short limbs, on top of that, they all have these unusually broad shoulders and tiny waist, and none of this can be changed, the end result are these hideous pygmies that move around very oddly.
Weight, height, and muscle can be tweaked. Increasing weight is the only way to make your male character have a half-normal looking trunk, but what if I'm a very skinny dude? I don't want to have this grossly muscular and chubby character as my avatar... on the other hand, females can't be anywhere near plump. So, I gotta admit I like tall girls, and while the height slider gets the job done for that, they all end up looking too skinny, the muscle slider actually TAKES AWAY body mass, what was the reasoning behind that? I don't know. And the weight slider doesn't increase the mass of legs or arms, only the torso... but well, at least they do have normally proportioned limbs unlike the males.
On the brighter side, your band is hugely featured in the game, you'll see them walking around in the background while browsing menus, tuning their instruments for the next gig during loading screens, etc., and whenever you advance in the game, you get these charming cutscenes of the band getting paid, going on a road trip, celebrating their success, and so on... it really makes you grow attached to your band, and it's sure to put a smile on your face. This is no good when you have a gorilla looking guy in there...
Also, I like to assign characters to specific instruments, but RB3 doesn't let me, why? I ask. You could do so in RB2, so why take away that feature? Now your stand-ins cycle randomly through instruments, making the band lineup feel disjointed and unrealistic. Not to mention that while the keyboard is the all-new original peripheral, you'll never see the keyboardist on-stage unless you actually have someone playing it.
Now, as I said, I like to look at my characters rock out in 'Performance' mode. I did it all the time in RB2, so I pretty much ended up learning all the character animations, and I was disappointed when I saw few new animations where added. The vocalist now finally uses a mic stand, so luckily there's plenty of the animations for that instrument. Guitarists and bassist were not so lucky though, they all have the same moves, but since characters are no longer restricted to a certain move set according to the personality system featured in RB2, you'll actually see more variety.
I was also hoping they fixed the character's strumming... for example, in Guitar Hero you could see characters individually picking each string during solos, and simply strum all of them strings during riffs, making it look very natural. Well, that's not the case in Rock Band, characters just jerk around their hands in this ungodly fashion which really, really annoys me.
Now that's all the small issues I have with Rock Band 3. Which are the big issues? None, the game is superb, it's accessible for anyone, with a great setlist which grows even bigger with all your imported RB, RB2, and downloaded songs. Don't let my ranting and rambling turn you off, the game is amazing, and shouldn't be missed by anyone who enjoys rhythm games.