More towns, units, items...
Graphics look much better (not just for that time, this pseudo-rendering in HOMM4 just plain sucks) and are more practical as well (iso is not really the way to go here)
Better balanced (more tactical depth, especially when including the add-ons)
better music
better controls
Better "overall-feeling"... HOMM4 just looks and feels so clinical. I love style of HOMM3. It might not look realistic at all, but it's just vibrant with all those colours, little animations etc... while HOMM4 tries to recapture that, it fails miserably. It just doesn't feel right... like a CGI-remake of the Muppet Show wouldn't feel right.
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