It's getting repetitive (and that's good, huh?) but this was a great episode. And it's going to be very, VERY, hard to wait other two weeks for the last episode.
About the characters, they were all great, and the end was very emotional. I missed Taylor though! :P

Is Season 3 the last season?

^ No one knows.
In a way I hope it is.. but in a way, I'd miss the show too!

Actually, they do.

It's not the last, a fourth season has pretty much been confirmed by everyone at this point.

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04/19 - Josh Schwartz is planning a major "reinvention" of the show next season. For starters, Kaitlin (Willa Holland) will move back to town full-time, sparking a "repopulation of the high-school universe," Schwartz says. "You will see a whole new generation through Kaitlin's eyes." The "older" set, meanwhile, will segue into a "twentysomething world beyond just the bait shop. There's a whole young-adult world in Newport for our kids to get in trouble in." Schwartz won't guarantee that the core four — Seth, Summer, Ryan and Marissa — will all be back, but he did share this most welcome scoopbit: Autumn Reeser (Taylor) will be made a series regular. "You can anticipate a more fully evolved, romantically evolved version of Taylor in Season 4." Source: Ask Ausiello @ TV Guide

The O.C. is NOT being cancelled now. We'll have at least the fourth season.