If you loved Star Wolves, you'll love this sequel.
I skipped on the second game as I only heard bad things about it, and if I'm not mistaken story-wise I didn't miss that much. The player characters of the original game are heroes and legends now in this game, and it kind of gives a nostalgic feeling when they make cameo appearances.
Game engine still there, still pretty good, but my complaint is the fog / particle effects really screw things up. Admittedly I'm playing on a laptop with a middle-class graphics card (middle class for 2007, that is... it's pretty antique now, with only 128MB of RAM), but it had no problems running the original game, and it doesn't have problems running the rest of this game either. It's only maps with loads of fog particles that screw the fps up. If you don't need to fight in the fog, the graphical lag is easily remedied simply by tabbing into the sector virtual grid map and following your progress from there. One bad thing about docking and shopping in a trade station, the lag is apparent even there, so I always make it a point to tab to the grid screen whenever I dock my ship. Smooth sailing all the way.
The game is basically a bigger, better, and more badass version of the original game. Most of the changes appear to have been for the better, such as not being forcibly retired to an intermission segment between missions. I don't know what the hell Norwegicus' problem was, he basically failed to upgrade scanners on his ship and kept running into enemies. Duh? I don't see how that's the game's fault. I too kept getting attacked, but I knew my scanner range was crap, and once I upgraded it (the scanner range has been improved, and most other items have had their stats upped as well compared to their appearance in the original Star Wolves), I had no issues avoiding hostiles.
True, the difficulty is a tad on the high side (a longtime reviewer of the series, ck753, also notes this), and if you don't follow the storyline missions there's basically nothing to do but explore, but that's the whole freaking point of a space sim: to explore the game universe. Granted, it would be nice to have more "mini goals" than just collecting exp and money so that you can ace the storyline missions, but it's not like it "ruins the game". That's the whole point of grinding for exp and money. If you don't like it... then just stick to the mission scripts.
It's one thing to dislike a game because it's poorly implemented, but that isn't the case here. Star Wolves 3 does have some flaws but they aren't gamebreaking. They aren't even major, they're just annoyances which not even everyone will agree on.
I do agree that the game can still use more polishing. I hadn't played the 2nd game in the series, so I missed out on that "mission board" thing, as well as several items were introduced there but taken out here, that kind of thing. I would've enjoyed more ship variety as well, I pretty much ended the game flying ships similar to the first game - for my light gun specialists, that is (the Trident). Heavy gun-type ships had more choice but they were still not very satisfying. I guess you can't expect to have uber 4-gun slots, 4-system slot ships, but most of the choices were really pitiful, given that they were supposed to be top-tier, end game ships.
Overall Star Wolves 3 is a pretty solid sequel. From one of the endings you can obtain, the story hints that there will be more. I really hope so. I really hope they come up with another game. It's just so much fun to tweak and play.