The document provides an overview of key changes and new features in upgrading to Smarty 3 from Smarty 2. Some of the main changes include: 1) Smarty 3 only works with PHP 5, 2) delimiters must now have whitespace to be treated as tags, 3) special variables now have local scope, and 4) new features like template objects, inheritance, and in-template function definitions have been added. The document also provides examples of how to address errors when upgrading and demonstrates how to use new Smarty 3 features.