Glad you asked. Let’s start off with turning radius. It is possible to have a circle of 3 rail O that is smaller than the minimum standard for HO. HO minimum standard is 18" radius, 15" is possible, but not recommended. Lionel traditional O gauge track makes a 31" circle, 027 is even smaller. Typical 2 rail O needs 36" radius or 72" diameter as it’s minimum.
In terms of electrical, things are much easier. Reverse loops and wyes are no problem in 3 rail, since the running rails are the same polarity.
One neat trick that comes from that fact is, the track can be used as an on/off switch. By insulating a section of one of the running rails, when the train with it’s metal wheels and axels bridges the insulated section, it can activate the device of your choice. Extend that principle to the entire layout, and you have a detection system that can run signaling, or even work with computer control.
Command control is available, and it is getting to the point where all of the top of the line locomotives, both steam and diesel, come with full sound, smoke, directional lighting, and remote couplers front and rear.
I’m not trying to sell you on 3 rail, because it is what I have chosen for myself. I’m just trying to help you make an informed decision. This question actually comes up from time to time. Here is a recent incarnation of one such discussion.
http://www.trains.com/community/forum/topic.asp?TOPIC_ID=48668
This link is to a current topic where I gave a construction update on my layout. Truth is if I wasn’t so heavily invested in 3 rail O, I would probably be in HO. Now I don’t have to worry about aging eyes.
http://www.trains.com/community/forum/topic.asp?TOPIC_ID=50067
There are a few different manufacturers that make track with blackened