Here's my two centimes on why QfG3 is not as (generally) well-loved or favorably remembered:
It all comes down to the villain. In QfG1, you face some very concrete villains - Baba Yaga and the Brigands. They are well-defined, and built up to create a sense of danger for the Hero and the land of Spielburg. In QfG2, the villain is shrouded in mystery for much of the game, but very early on you get many examples of his evil and foreshadowing of more to come (Elementals, the caged beast, Aziza's crystal ball, etc). In QfG4, the entire atmosphere is that of suspense and mystery. You know that there is a great evil confronting you, but who is it? It could be anyone in this creepy land of Mordavia. It could be the innkeeper, or your secret crush.

Everyone has something to hide, and examples of this evil abound, from the monestary to the swamp, to the craziness of carniverous rabbits. In QfG5 we have another clearly defined villain, the dragon, although the mastermind behind it and the assassin provide the mysterious element.
The key is this: these games have a sense of crescendo. You start out small, and the tension builds slowly, until you get to the end and the tangled skein begins to unweave. When you defeat the enemy, you feel a sense of accomplishment and heroism. Now, perhaps this is just me, but I didn't feel that there was a crescendo in QfG3, nor did I feel that I really accomplished anything. This is because there is no real sense of danger built up throughout the game. In order for there to be suspense, the threat has to specificaly target the Hero, or someone close to him. Never did Wages of War make me worry greatly, indeed, I didn't have any sense of urgency until the very end. At that point, when the demon reveals himself, he has not been built up enough as a "bad guy" for me to feel anything towards him. I understand that he must be defeated, but how can I tell that if we met on the street, he wouldn't be just some guy?
That's my theory. Crescendo. This isn't to say that QfG3 is not a good game, by any means. It has some very important sequences, it plays an important role in the series, and explores areas of adventure that the other games do not. However, it really lacks that good villain the rest of the series has.
(Note: QfG5 is not the best example of crescendo...mostly because of the letdown at the end. This is another important element of the series that is also missing in QfG3: the payoff. Before the Hero can celebrate his victory, he is whisked away! Obviously, this is an important plot point, but it also doesn't create that feeling of triumph. In QfG5, as we all know, the problem is that there is no real celebration. Another factor there is probably that instead of using your intelligence to defeat the enemy, for the first time in the series you use mainly brawn to kill the baddie. But that's another topic, for another thread.

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-hoopyfroodcat