Audiobooks built using Audiobook Builder should play fine on your third generation iPod. We have heard of some issues with Chapter support on the legacy iPod (non-iPhone OS) architecture, though.
Some users have found that when trying to skip to another Chapter, they'll instead end up back at the main menu. This is an Apple-acknowledged issue for all Audiobooks that have parts longer than two and a half hours (not just Audiobooks built with Audiobook Builder).
Luckily, there's a workaround that many have had success with. If you tell Audiobook Builder to use a maximum Part length of about 2:15, in the Build Options, you'll end up with Audiobooks that don't exhibit the skipping ahead/returning to main menu symptom. If your existing Audiobook files do not contain Chapters over about an hour in length you can drag them to a new Audiobook Builder Project's Chapters list, set the Maximum Part Length preference to 2:15 and Build to get several smaller Audiobook files that should weigh in around 2.5 hours in length or less.
I hope this helps!
_________________ Allan WoodallPhosphorescent PhageSplasm Software http://www.splasm.com
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