I played through the KZ3 demo and here are my thoughts.
It's more responsive than KZ2, a lot more. It no longer feels like you're running through mud and the controller lag is almost all gone.
There is an issue still with the framerate I feel. At times during heavy action it doesn't feel completely fluid. As I mentioned, the controller lag is almost all gone. Still a bit noticeable but not anywhere near what it was like before.
Those who are hardcore KZ fans may think this is the perfect KZ version yet, but coming from someone who plays close to all FPS on both consoles and PC, this one isn't perfect yet - but a huge improvement from before.