PROTO 3,OR PROTO 2.0

No tether, smaller form.

No battery and no tether…two significant "pluses" in my opinion.

That said, some folks have reported problems now and then with the tether less connection (steamers only, of course).  I have not experienced any problems, but I have relatively small steam power and once I make a secure connection between locomotive and tender, I maintain that connection even if I am moving the locomotive/tender combo from one location to another by hand.

Follow the money trail.

These model train companies have to come up with new technologies, to keep us buying.

2.0 to 3.0

Computer software is the biggest player; version 3.1 to version 4.2

Do not forget cars, they are designing new models every year and 1/2 year.

When Lionel introduced, Odyssey. It was the latest & best. Now we have Odyssey II Speed Control.

Business........

I personally prefer PS2 over PS3. I despise that wireless drawbar and have had nothing but problems with it (and I now have secured it with a zip tie and do NOT unplug it and so far no problems). I prefer the sounds in PS2 and I also have had minor quirks/issues with the 2 PS3 engines I have. The battery is no big deal in my book. 

My preference is PS2 in the steamers BUT as late model as possible. I don't mind the pigtail connector at all and have had trouble with the wireless drawbars which are a design whiff by MTH IMO. In general the PS3's I have are more detailed with noticeably better sound and lights than the earlier version of the same engine in PS2 but I'll snap up a PS2 whenever I can get it if the price is right. Also need to be aware that the very early "white battery" PS2's are prone to board failure but I've only had one of these. Recently I got a PS2 P-47 on eBay for very little. Other than the pigtail you would never know it's a PS2 from the detail, lights and sound quality so I'm guessing it must be late model right before they went to PS3.