Well, a full Pegasus army or a full Dragon Fly / Wyvern army is REALLY useful :)
My opinion exactly. The others do not agree, that's why I answered. The Fortress is the best according to my play style, and I thought it had too little love in this thread, but my brother does miracle with the Castle.
I tend to think that one or two castles are sligtly below par (I won't say which), but by a small margin and maybe only because none in my "play group" used those (well).
HOMM 1 was not balanced at all, HOMM 2 had a good balance, except for the knight and barbarian only balanced for small/mid size map. HOMM 4 had good balance for the castle, but not as good as HOMM 3. Never went far enough in HOMM 5 to tell.
Also : I have no idea of the balance of the Conflux in MP since we mostly played before we had the add-ons.

Yeah well, you know what I mean ;) Plus at this stage you don't really care about your logistics issues. At least I don't. :D
To talk about something else here, my interest in playing HoMM3 (without WoG) has been renewed since I decided to play versus only one AI on XL maps. The fights are quite challenging, you have to be very picky.
Edit : I used to play with a friend of mine and when I was alone I used to play against all AI in the same team (which was a lot of fun).

Basically, the Conflux are one of the best because:
- You get 50 sprites a week, and while they're weak you can't retaliate against them.
- Their level 2 and 3 units are both shooters with high HP for low levels, and absurdly high damage (Storm Elementals can do up to 8 damage, which is insane for a lvl 2 unit).
- Fire elementals and Earth elementals are rubbish, but if you pick the right hero you can get an Attack/Defense/Damage upgrade for the Earth Elementals, suddenly making them about as useful as a Pit Fiend
- Psychic Elementals have an awesome AOE attack, and are reasonably quick to boot
- Firebirds ... need I say more? Guaranteed first attack every game.
Combine that guaranteed first attack with a mass spell (like Haste or Slow) and you can have a massive advantage right off the bat.

Don't forget that Conflux enjoys the presence of Luna, whose Firewall specialty and some careful maneuvering can give you a huge advantage over your opponents in opening up the map. Ciele is another excellent Conflux hero because of her Magic Arrow specialty and fhe fact that she starts with Basic Water Magic. With some decent tactics, this can also lead to a sizeable advantage in opening up the map, as Ciele with 7 sprites and decent magic stats can be surprisingly effective in clearing out neutrals that the main army cannot be bothered with just yet. Most other towns can only effectively clear neutrals with the main hero in most cases.

One of the mistake when analysing COnflux is believing that Air / Water elemental are level 2 and 3 units, and fire aand earth elemental are level 4 or 5 units. They had to show the units they took from HoMM without expansion in "an order" , this led people to believe Air elemental was a good level 2 unit and earth an horrible level 5 units, but that's just not true. All of their lairs can be built in any order, they are equally powerful and pricy - they all are of the same level and have about the same growth rate (level 3.5 ?).
Overall, it is as far as I know a great castle (I am not expert on this one, I played MP before the expansion) but not because of those reasons.

I'm not as experienced as you guys, but I love Dungeon for their two archers available even at low levels and their harpy hags, which you can't retaliate against AND which function as a ranged because they go right back to their starting point after their attack. I love to play Dungeon with Amar the warlock, because with mass slow the black dragon, harpy hags, scorpicores, and two shooters can all get in shots before the enemy attacks even once, especially if you have any sort of haste item at all. And with the mass haste spell, every last one of your units may be able to hit an enemy without retaliation.
Additionally, Amar has Basic Scholar, which makes him a great main hero because he can teach everyone all the spells he gets from roaming the map. Additionally, with Expert earth magic, he can town portal multiple times and stock up every week easily, teaching everyone hanging around any castle all the new spells he has while dumping all the junk he collects and scooping up any new hot items from your alternate heroes. While there he can replenish and then DOUBLE his mana in one turn at a native castle. And then mass slow plus mass haste plus resurrection specialty makes so many battles with this guy a walk in the park.
Great town IMO.

Dread Knights in the first week is easily possible, all you reallly gonna have problem with is the 10 sulfur for Liches

Oh yes, my bad. I thought that you need some crystal and gems for Estate (but that is only for its upgrade).

I bump this thread to see whether there are new inputs.

Having played Heroes 3 for a long, long time, I'd like to add my two cents, whatever they're worth.

Firstly, on the question of speed:
- Your heroes' overworld movement points are determined at the start of your turn by the speed value of their slowest troop. If you have a troop of all one type, you have no movement penalty for travelling over native terrain, a feat matched only by a hero with Expert-level Pathfinding - which can give the Fortress and Inferno a huge advantage on their native terrains. A hero that can't get away from you (or can't catch you) can be fairly well neutralized.
- In combat, having the first choice of move is always a tactical advantage, since you can narrow your opponent's options for retaliation, while still choosing to keep your own choices open. First to wait is last to move, which means that with the first choice you have more options available than the opponent.
- In general, speed is an advantage in and of itself, and it can be a big one. The number of times that I've led enemies on a wild goose chase around the field for my last target while frying them repeatedly with turrets and Lightning Bolt spells to win an otherwise lost fight is sadly too numerous.

On the matter of assigning "tiers" to town types:
- Don't. It's not worth it. Every town has a place where it's at the advantage and at the disadvantage. Rating the "Player-friendliness" of the troops, as done above, is far more useful. As with anything else, it's all a matter of adjusting to suit the situation.

On the matter of heroes:
- Don't be restricted to heroes from your own town! The Conflux heroes with spell-based skills work equally well with other unit types. In fact, one of the big advantages of the conflux heroes and units is their strength in working with other unit types, with the elementals being some of the only units in the game that can mingle with the undead.

The game is reasonably well balanced, to the point that just about any play style from the purely reckless to the purely defensive is accomodated, provided that the player is flexible enough to make it work and well-versed enough to understand when to pull what rabbit. Being a fairly careful player myself, Fortress and Tower are my preferred towns (but not the only ones in which I'm proficient), those being the "safest" unit types - Tower because of all the shooters, Fortress because of the focus on defence and the hero bias towards Armourer and Resistance skills. The first strike is important, and it's rarely the Fortress that gets it - but the last strike is far, far more vital than the first. The Gorgon death gaze - which is purely a numbers game, and is not based on chance but on the number of Gorgons in the group - is a giant-killer, a rare thing for a fifth-level creature, and it works even on the "invulnerable" black dragons; I tend not to rush Wyverns in favour of developing Mighty Gorgons on the QT. And Tazar (specialty: Armourer) is one of the few heroes that I'll request by name; at high levels, he's devastating to magic-based heroes with low attack power. The Tower's three shooters (and the mere presence of Titans) make it a terrifying force behind a castle wall - and supplemented by the most versatile magic-users in the game, due to both the high Knowledge of the Wizards and the Library contributing extra spells to the pool.

The long and the short of it is this: Develop your tactical skills and your management, and you'll be able to use any town-type in any situation and spin it to your advantage. It's simply not worth your time to sit down and categorize who's better than who in general terms, becuase the game plays out in specifics. And if you wanted to break down every conceivable situation and evaluate every conceivable stratagem for dealing with them and then put their varied rankings to the test, then I might listen to your tiering - but only after making snarky comments about the years lost to such an ambitious (read: insane) project. In the end, it comes down to play style, personal preference and tactical skill.

I have only been playing this game for about 2 months, but I feel I can say the following. Note, if you feel this is too judgmental, look at the bottom where I reveal my favorites...they are not the top ones!


Town User Friendliness:
========================
"Easy" Towns:
*Castle - Every unit is at the top of its class.
*Tower - Every unit (except gargoyles) is at the top of its class.
*Necropolis - Vampire Lords + Dread Knights + over 9000 Skeletons = win. You really only need these three stacks to attack, all other units can stay home to defend.
*Conflux - Two excellent shooters in week 1. Magic Elementals are extremely dangerous. Phoenix only cost 2000 gold each, and you get 4 of them per week. As long as you take care to cure and protect the Phoenix when they get hit, they are an awesome unit.

"Medium" Towns:
===========================
*Fortress - Very effective units, although it takes a skilled tactician to use them well. Since they are large and slow you will need to move them around carefully. You also need to know how to be gentle with the dragon flies and wyverns and don't let them get killed.
*Rampart - Pretty good units, although gold dragons aren't so hot and you need to know how to utilize the ultra-slow dwarves and dendroids.
*Stronghold - OK units but as a previous poster said, you have to be careful that the wolves/rocs don't get mobbed.

"Hard" Towns:
=========================
*Inferno - The only clearly solid unit is the Cerberus, a L3 unit :( Everything else fails when compared to peers. Devils just plain suck, expensive with low stats. Efreeti are delicate like little flowers. Pit Lords are slow and have a special that you can only use when you are already losing the battle (not a situation you should plan for!). Takes a good player to win with Inferno.
*Dungeon - Everything is far too expensive. Minotaurs are good, but the Manticores and the dragons are just too expensive to be worth it. Harpy Hags are good, but expensive and can't take much punishment. Your enemy has 8 phoenix when you have 1 bd. Dungeon is redeemed a little by having some cool buildings, namely the Portal and the Vortex.

Best Skills:
1 - Attack. (Explanation: How do you win battles? By Attacking!!)
2 - Knowledge
3 - Defense
4 - Spell Power

Best Hero Types:
1 - Barbarian (attack is the best skill and barbs get the most)
2 - Planeswalker (good attack, plus innate tactics and decent % to learn magic2dy skills)
3 - Beastmaster (awesome defense)
4 - Ranger (decent a/d)
5 - Everything else

Best Magic:
1 - Earth (Mass Slow + Town Portal + Resurrection)
2 - Water (Mass Prayer + Mass Cure + Mass Bless + Water Walk)
3 - Air (Mass Haste, increased damange on lightning/chain lightning)
4 - Fire (Good spells but upgrading them doesn't do much except for berserk).

My favorite town: Fortress :) Favorite Hero: Alkin. I agree with the other fortress fans here: Mighty Gorgons rule!!

I 've played a single game a few years ago starting with 2 tower cities one of them called Mount Olympus and having all heroes names out of the greek mytholigie but I cannot find the game anymore .
I got both Heroes 3 and Heroes 3 complete .
Is there anyone know the name of that game ??

Both "Myth and Legend" and "Pandora's Box" are greek myth themed. Both are XL scenarios.

This is the truest comment in this thread and should be heeded by everyone who has just started reading this thread again in 2015.

Another thing to keep in mind is that when most ppl say a town is better than another you really really need to know if they mean vs the computer or an actual live person. Against live people is a lot harder depending on their game exp ofc. Also usually in pvp games their are "house rules" and the most popular of these are No using Necropolis and Conflux for starting town, No Dimension Door or Fly Spell/Artifact (no DD/Fly) usage allowed.