Jeff thank you for your help. As you suggested reducing the default landscape sharpening detail setting of 50 to a lower value has solved the problem. I've tried this with the 1Ds Mk3, 1Ds Mk2, G10 and G9 at ISOs of 800 - 3200ASA and found a detail setting of 10 about right. I now see the improvements in Lr3. Image quality is equal or better than Lr2. Colour noise is much better controlled and, if one requires it, the luminance noise reduction slider works really well.
I have become so dependent on Lightroom that without it photography would be very difficult.
Kudos to the Adobe team for the new improvements. Admittedly, I've been rather outspoken on ACR/LR's handling of my A900 files over the last couple of years, and I quit using Adobe for raw conversion well over a year ago. Well, with these new demoisacing/NR improvements, I fully plan on investing in LR3 when it is released. We're just lens correction and soft proofing away from heaven....