For anyone who has seen the first and second Toy Story movies, the opening sequence alone was nearly worth the ticket price. It parallels the opening scene from the first movie, only this time it's from Andy's point of view, with several of the new characters from TS2 thrown in for good measure.
TS3 was excellent, using enough quotes (or paraphrased quotes) from the first films to bring a smile to the lips of adults and enough fun and new characters to keep everyone happy.
The only drawbacks I can think of are that there are a few very suspenseful scenes that might be a bit intense for very small children. (Think: incinerator.) There are also a couple of tear-jerker bits, but nothing that isn't typical of Disney.