3-Rail O is great for around the tree or for people who just want to run toy trains in loops. However, there have been some exceptions in the last few years. Hobbyiests who have put together award winning MODEL RAILROADS in 3-RAil O. Namely, Bob Bartizak and John Shankland and they actually OPERATE their 3-Rail trains in a prototypical manner. However, these guys are in the minority.
In 3-Rail there is a lot of nostalgia for Lionel and for the Golden Age of Railroading (40s and 50s). Not that there is anything wrong with that but on the other hand 3-Rail O is where the train manufacturers are by far the most greedy. Unlike HO and N scale the O Gauge manufacturers NEVER work together on anything and are constantly inventing things which they then patent so no one else could use their ideas. I would like to see how this policy increases their bottom line as I think it only hurts the manufacturers in the future and definately hurts the hobbyiests both now and in the future.
If you like the idea of loop running consider 3-Rail O but if you want to do some model railroading my advice is to pick anything but 3-Rail O. HO, S, N, and O Scale (2-Rail) all have standards both electronic and mechanical.As it was said above please go to a hobby store and decide what you like. Problem with that is most hobby stores don't carry S or O Scale (2-Rail). Try to find one that has it all. I wish I would have known about S before I got started. S would have been perfect for my basement.
I am from the 3-Rail O which is why I know a lot about it. I am now in O Scale (2-Rail) and will never go back mainly for the reasons I mentioned above. The good thing about 2-Rail is I can still use some of the nicer scale sized operating accessories if I like. Just add a little weathering or some details. I am not so fanatical as some other modelers.
Yes, O Scale (2-Rail) can be very expensive but there are deals that can be found. I bought the Sunset PRR K-4 brand-new (the nicest K-4 in O Scale that I know of) for $599. True it doesn't have all the bells and whistles like the BLI but it is brass and extremely well detailed and runs great. I also got a 3-Rail C&O T1 for the same price (used) which I will convert to 2-Rail which also runs great.
Figure out what is best for you. And what will give you the most fun.