Jann the S3 was really just a minor upgrade to a great camera.
Here what dpreview said:
"Overall conclusion
Where the S2 IS offered a huge performance leap over its predecessor, the S3 IS is in reality a minor upgrade, and with good reason; there was a lot less that needed improvement. Aside from the newer sensor, the welcome addition of a direct ISO button, sports mode and marginally bigger screen, the biggest change is the paint job, which has produced a camera that looks a lot less toy-like than the S2 IS.There is a slight improvement in image quality; a bit more resolution and much nicer looking ISO 400 output (though as noted in the review, ISO 400 on the S3 is nowhere near as sensitive as ISO 400 on the S2), but to be honest I think you'd struggle to see any real difference in a normal sized print.
Comparisons with it predecessor aside, the S3 IS Image quality is very good - certainly on a par with most of its competitors - though the results are still a bit on the soft side, something the fairly high default sharpening doesn't really help. Again, experimenting with the in-camera parameters and a little sympathetic post-processing means that in the right hands it can produce images every bit as good as anything else in its class. The ISO 800 mode is probably too noisy for anything but 'emergency' use, and there are occasional exposure problems, but generally speaking the output is pleasing enough to satisfy the majority of the intended market.
But ultimately, like the models that came before it, the appeal of the S3 IS goes beyond simple pixel-peeping; it has a class-leading feature set, a very reliable image stabilization system (the benefits of which cannot be overstated) and superb handling. It's well-priced, incredibly versatile and - above all - highly enjoyable to use. Despite the long lens and speedy operation it's not the ideal 'sports' camera (the focus at the long end of the zoom isn't fast enough and does hunt a little), but for sheer shooting pleasure and versatility the PowerShot S3 IS still takes some beating.
And so to the rating. There was a part of me that felt slightly disappointed that the S3 IS was such a minor upgrade, and that the new high ISO mode added so little. But there are some subtle but important improvements, and the S2 IS was a worthy recipient of its Highly Recommended rating. There are cameras out there that offer slightly better image quality (certainly in terms of sharpness), and I'm pretty convinced that the Panasonic image stabilization system is slightly more effective, but taken as a whole there is nothing out there that offers the feature set, handling and sheer fun factor of the S3 IS, and so it still - just - keeps hold of our top rating."