Type III is hard anodizing, like they use on military stuff and the green Surefire flashlights. Type II is not as tough and will wear away more quickly, it's used on Maglites. Type II is probably the most common, since you can get it in lots of different colors.

The thing I don't like about anodizing is that it gets dinged up, sooner or later and then it looks like crap. Type III is just a lot less likely to get dinged up.