[Russ]

Yep. While I might agree that the class flexibility is more true to life, the prestige classes are way overpowered (what on earth is a paladin or ranger, if not a prestige class? Anybody ever thought of how incredibly unbalancing a mere 1st-level totemic druid would be?), and, much the worse, the rules trivialize the differences between the sentient species, reducing them to nothing but races.

What's a halfling that's not a short nimble human?
What's a dwarf that's not a short strong stocky human?
What's a half-orc that's not a big strong unbrilliant human?
What's an elf, that's not just a human with pointy ears and long life?

It totally destroys the roleplaying involved. There's a REASON different species don't produce certain classes... paladinhood is based on human concepts, one of which is the fragility and shortness of life.. makes no sense for an elf to be one. Dwarfs don't produce wizards... but they make wonderful magic items. How? Well, humans produce them in military factories or wizards' workshops, but for a dwarf, smithing and manufacturing is literally a religious experience...

3rd ed. destroys all of that.