For those who don't know, the Guitar Hero 3 demo just hit XBL Marketplace not to long ago. Now I've played GH2 at a Walmart kiosk, but didn't spent enough time with it. So with this version as well as the others, I clearly thought the guitar controller could only be used and nothing else. But to my surprise, I found myself actually using the 360 controller. One problem, it's nearly impossible with the D-Pad...at first. But after a while, it's a bit easier, still difficult though. Other then that, I loved it, all 5 songs in the demo were excellent, especially "Even Flow" by Pearl Jam and "Rock You Like A Hurricane" by Scorpions. Can't wait to learn what some of the other tracks are. Of course I plan on buying GH3, and the guitar will certainly come in handy. As for using the D-Pad instead, DON'T, but I'm sure you already know that.
EDIT: After spending more quality time with the demo, maybe I'll consider using the 360 controller...we'll see.