Rails 3 provides several changes and improvements over previous versions. It utilizes Ruby 1.9.2 and Bundler for managing gem dependencies. The Rails environment and root paths have changed, as well as aspects of routing, validations, sessions and mailing. Additional plugins like Jpmobile and Devise help customize Rails for mobile applications. Overall, Rails 3 incorporates the Rack middleware framework and modularizes components for better extensibility and plugin support.