The biggest update in the game is probably simply in the graphics -- while MvC 2 still looks good, the menu systems and 3D backgrounds were showing their age by the time the game rolled around to a downloadable re-release. MvC3 futureproofs the franchise for another few years at least -- Capcom has brought in all of their Street Fighter IV flair, and while the graphics aren't a straight ripoff of that game, the influence is definitely there. Backgrounds are gorgeous, too, with lots of little Easter eggs to find (I saw the Daily Bugle and signs of the Bonne family), and progression throughout the stages, like a platform rising up through the city, or hippos arriving in the African grasslands to watch as the fight goes on [Update: Well, that second example is from Super Street Fighter IV, but that's what we mean by progression through the stages.]
Controls are more or less the same as the previous version (you can hit one bumper to switch out either one of your other characters, or hit both with your power meter up for a triple attack), with one exception: the A button (on the Xbox 360 version that we played) is now a launcher with all characters. In the previous game, only some moves would knock opponents up into the air where you could jump up and pull and aerial smackdown, and now all characters can put their enemies in the air just by pushing one button. Hardcore players may groan, but of course that brings some new strategy into the game.
The characters available in the demo included Ryu, Wolverine, Iron Man, Captain America, Morrigan, Chris Redfield, Hulk, Deadpool, Felicia, and Dante in action. No surprises, but they all played beautifully, with some moves from the old game, and a few new ones in the mix as well. Dante was one of my favorites after a few rounds, combining some powerful closeup sword movies with solid ranged attacks from the dual pistols. Deadpool also played well, combining ranged and melee attacks with some snappy patter.
Wolverine actually played better than his MvC2 incarnation, in my opinion -- his attacks were a little slower, but stronger. And on the flip side, Iron Man didn't seem quite as powerful as the last go around. Although this was clearly a demo version (not the finished product), and I only played a few rounds against other human opponents, so balance is still far from concrete.
Is it fun? Yes. Hardcore fighting fans will probably stick with Street Fighter IV, and might even scoff at this one a little bit as being a little too forgiving and easy. But Marvel vs. Capcom is about pitting superheroes and fighters against each other in a spectacle of combos and flashy moves, and the new iteration does that impressively well so far.