It's a little smaller, a little lighter, a bit less expensive and it shoots stereo and 2D in HD, stills and video. And have they improved the horrid, unintuitive controls of the W1? It appears so, from the twin dials on the camera back. Hey, I love the things they got right with the W1, but the menu interface wasn't one of them.
Go here to the Fuji site for more info.
Read the Gizmodo hands-on review here.
A side-by-side comparison of the W1 and the W3 from Engadget.com.