I played Guitar Hero 2 at a friend's house for the first time last weekend and I loved it so much that I bought GH3 with the two controllers. I read some of the reviews where people had said it's too difficult and wasn't sure what to expect. Well, it isn't that hard at all. It is a tiny bit less forgiving than GH2, but I can still hit 99% of notes on easy (that 100% is still eluding me!) and I've only played it a few times.
The graphics are, well, the same as before, which is basic. But this game isn't about visual appeal, it is about playability and it has that by the shedload.
I'm not an all-out rock and metal fan (Foo Fighters is my kind of thing) so, for me, the songs make up an interesting selection of rock and pop-rock hits from the last 20 to 30 years. There's many songs I don't know and there are a number of catchy melodies that, although I wouldn't buy them, I am quite happy to 'rock out' to on GH3. You can also buy a number of new songs, so you shouldn't get too bored, too quickly. Plus there are the encore songs - but only if you're good enough!
Finally, I recommend getting the two controllers. Even though they are wired, the wires are very long, so unless you're going to spin round and knock over the furniture while you're at it, this shouldn't be a problem. The advantage of the two controllers is that you can play with a friend in the 2 player mode and either battle each other, or play together as a band in a guitar/guitar, guitar/bass, or bass/bass combo.
In conclusion, a great game that is marginally harder than its predecessors, but, if you can't do well on it, you must have no rhythm and should stick to Gran Tourismo or something.