Quick question is ipad 3rd generation better than ipad 2 and if so why can you only buy the ipad 3rd generation in certain shops like arnotts and Harvey Norman but can't buy it on the apple site.?

The iPad 3 was replaced by the iPad 4 in Apple's lineup of iPads. The iPad 4 is now replaced by the iPad Air.

While The iPad 3 is better than the iPad 2, i.e., retina display, faster processor, more memory, better camera the iPad 2 is retained as the lower cost entry-level iPad.

iPad 3 was replaced by iPad 4 is replaced by iPad Air.

And also wondering is there a huge difference between the 2nd and 3rd generation.

iPad 3 has retina display, double the pixels count than iPad 2.

iPad 3 has faster processor, faster graphics card, double built-in memory.

This is just the way that I see it and it is certainly nothing official from Apple.

When Apple updated the "retina" iPad, which was the 3rd generation, they changed it to the iPad 4 and quit making the 3. The 4 was basically an upgrade from the 3 and it made no sense to make two devices that were so close in features. Recently, Apple came out with the iPad Air which meant that the 4 would no longer be made since the Air is an "upgrade" from the 4 with slightly better features.

Apple continues to make the 2nd gen iPad as a less expensive alternative to the "full sized" iPads, but I imagine that they don't see any need to keep a line of iPads in production (3,4 and Air) that are so close in features and it just makes sense to only produce the latest model.

So now you can choose from the iPad 2, the iPad Air, and the two versions of the mini.

I have the iPad 3 and I love it. No issues at all.

As well as the above replies you will probably find the iPad 2 stops supporting iOS updates sooner than the iPad 3 does (as the 3 has a quicker processor and twice the RAM) - so the 3rd gen is likely to be a bit more 'future-proof' (the first gen only supports up to iOS 5.1.1, the current version is 7.0.4)