Folks, I drive a nearly stock 1960 Series II about 2000 miles a month. Mrs. Ratcliffe owns a 97 Discovery which I have driven a great deal. I have driven both the Range Rover and LR3 extensively.
If the issue is modification, than there is less opportunity for modification as the marque goes forward. But you really can't compare any of them car to car. They all have some fairly severe limitations, by model. I have always been amazed when someone in a Discovery goes on about how capable a series is. I don't know why, but a discovery has more power, better steering, better throttle control, better braking, and better articulation stock than any series.
Now, would I trade my series for a discovery or other Land Rover? Nope. That is because the car I chose provides me with what I want in my driving experience. I don't mind not having a radio to listen to, that there isn't any air conditioning, or that the brakes take a conscious effort to use, that I can't leave the house with out a tool kit and good pair of walking shoes.
Land Rover doesn't owe me anything that I can see. I don't see the new Range Rover, LR3, Sport, etc. as less Land Rover. Wouldn't I be silly if I thought that Land Rover should build a vehicle that has a carbureted 2.25 67 hp engine capable of a top speed of 78 mph, with single circuit drum brakes, independent single speed windshield wipers, no windshield washers, no safety glass, etc. etc? Just to keep me happy. In truth that series is a rolling death trap, I might survive the ownership experience, but I fear it will require a great deal of luck.
Pricing is always something that one could spend days carrying on about. The LR3 is much more expensive, I probably won't buy one to replace Mrs. Ratcliffe's Discovery because of the price, but I have too tell you that the 31k I paid for the 97 was a damn sight more than I have ever paid for any car, and more than I will probably ever pay again. But that LR3 is worth the price; it is heads above the Discovery in most of the things that make a good vehicle a good vehicle.
Just the way I see it.