I keep getting asked that question… so… here’s how I answered on Google+ earlier:
The 3rd Edition Core Rules add two magic items, a handful of monsters, a page of sample traps, and one additional official combo class (Elf Magic-User/Thief) which was in the Gnomes supplement previously. Besides that, a bunch of new art was added, a number of errors corrected, and a couple of things clarified.
The most important thing to understand is that new editions of the Basic Fantasy RPG Core Rules do NOT make older editions “obsolete.” I know there are some people with 1st Edition books who still use them, and they are playing the same game as the rest of us. My players all have 2nd Edition rulebooks, and they don’t need new ones… the 2nd Edition books will work just fine indefinitely.