I love the look of the 2nd-gen but it was Toyota's first, all steel-bodied 4runner with 4 doors and they still had some things to work out. The rear door openings on the 2nd gen are pretty small and rear seat room is limited. Also, the power rear window has marginal reliability and it needs to open in order to open the rear gate.
The 3rd gen did a great job addressing the shortcomings of the 2nd gen. It has larger rear doors and more rear seat room, a reliable lift-gate in the back, and a great set of engines that are more powerful and fuel efficient than the predecessors (I especially like the 2.7).
While many people are happy with the 3.0, it is not one of Toyota's better engines. The 2.4L 22R-E, while it has slightly less output, is regarded more-highly for its reliability and fuel economy.
'85 4Runner & Four-Seasons Magnum pop-up