OK, installed the iPhone 5 in the 3rd Generation Lifeproof case and here is what I think.
First thing I notice is that the big yellow sticker on the back shell peels off nice, smooth and easy, leaves no residue behind.
The case passes the 1 hour water test with flying colors.
The new rubber pad eliminates the speaker buzz/rattle from the back panel and is a wonderful improvement.
There is still some pillowing on the very top and bottom of the front plastic screen shield near the home button and top camera/speaker areas.
Calls seem better as everyone can hear me nice and clear and they do not sound muffled on my end either.
The proximity sensor works perfect and I can end calls with no problems at all.
There are a couple of small areas of oil slick/rainbow behind the front screen shield.
The front and back of the plastic case seem to fix together a little better.
My second generation the fit was off pretty bad and had a noticeable lip where the front and back shells meet.
Overall this 3rd generation model seems better then the first two versions.
Im sure there is a 4th version out there and Ill keep an eye out for it in the near future.
These are only my thoughts after using the case for an hour or so, you mileage and experience may vary.
Good luck.
