Heroes3 is better than Heroes2 in every way. They introduced several new town types, such as the elemental conflux and the necropolis. And instead of 2 good and evil campaigns, you have about 5 or 6 smaller campaigns, each campaign has several scenarios. You can also expect to see many new artifacts, monsters, and spells.
One thing I like about Heroes3 is that you can no longer give a hero 10 swords to make him powerful. Each hero can only use one sword and can only wear one helmet((more realistic this way). Another good thing is that you can use a sub-terraneun gate to go to the underworld.
There is a package called "Heroes III Complete" that included the expansion Armageddon's Blade. You can buy it at amazon.co for $29.99. It's well worth the money.