Thief 2 is definitely the best Thief, but I hold Thief 3 in higher regard than the original. Sure, you couldn't swim and the rope arrow was missing, but in terms of how the stealth functioned, the flow of the story and the overall design of the levels and the missions, I consider Thief 3 to be a much better achievement.
For me, Thief 3 did several things right and several things wrong. On the "right" side, the dynamic shadows were awesome. Simply allowing guards to carry torches really changed the way the sneaking worked, and the shadows were really impressive to me at the time. Then there are additional tools like Garrett being able to press against a wall to avoid being seen which were very cool. The writing and voice acting was just as good as the first two games, and it offered a great conclusion to the story. And, as everyone says, the Cradle mission is amazing.
But there were a few things wrong too, foremost among them the tiny, tiny levels. The open city sections should have been awesome, but instead they made the city feel tiny a claustrophobic, with each area only holding a city block or two. The entire city in Thief 3 felt smaller than the Thief 2 mission that sees Garrett sneaking through a small section of the city. It just made the city feel all wrong. And since Garrett was free to wander around the city, steal everything, fence it, and keep all the cash and equipment between missions, the missions became very easy. I always had the maximum allowed amount of tools like gas arrows or flash bombs, so to get a decent challenge I had to impose rules on myself to not use them.
I will grant that, given the engine limitations, the level designs for the missions were very well done, but I still missed the huge, seamless sprawl of the levels in the first two games. With a better engine and more time spent on the open city, Thief 3 could have been so much better.
Also, everyone remembers the Cradle, but don't forget about missions like the Haunted Cathedral in the original game. Some stuff from Thief 1 was just as terrifying.
Conclusion: Thief 3 is still very good, but I like the first two games better.