Awesome Music: From the AGD remake ("King's Quest III Redux"), the music "Coming Home". It's even better when one considers that it fits a freed slave perfectly.
Growing the Beard: The game features much improved graphics over the first two games, even if they are still AGI. The plot is a lot more intricate rather than a random collection of fairy tales.
It Was His Sled: Gwydion's true identity. The title does kind of give it away all by itself though.
Paranoia Fuel: The first half of the game runs on it, with Manannan breathing down your neck at every opportunity. Even when he's off on a trip or napping, you'll finding yourself eyeing the timer constantly, ready to make a mad dash back to the house and hide everything before he gets back/wakes up.