I have an '06 with an automatic trans and off-road package. I think the "underpowered" issue is blown out of proportion. I have no complaints about the power with the type of driving I generally do, which is probably similar to the vast majority of owners: one occupant, not usually towing, a combination of suburban/rural roads with some fairly steep grades and enough Jethros driving honey wagons and miniture, blue-haired elderly ladies with their faces pressed against their windshields affording me many passing opportunities. I don't have any problems maintaining the speed limit. The off-road performance goes without saying - plenty of torque.
Now if you want a street queen that can win drag races, but just looks like an off-road capable vehicle, the H3 is definitely not for you. And the power increase in the '07 is not significant enough to change that.
You might also consider a different vehicle if you regularly load up with 4 passengers, put a heavy load on the roof rack, tow a large boat and expect to climb a mountain at 70 mph - 'aint gonna happen. If you're like most people though, you OCCASIONALLY may tow a reasonably sized load, fill the seats, and be content with hanging out in the right lane.
I find the 3 to be surprisingly nimble on the curvy and hilly Pennsylvania roads that I travel on and the ride, while fairly firm, is very comfortable. The interior is plenty comfy too, albeit a bit short on some ameneties like a glove box light and useable map lights, etc. (I have the luxury option). Let's face it. You're never going to find a dual-purpose vehicle that scores a ten both on and off-road, provides a perfect compromise between performance and fuel economy, and is practical for every lifestyle. But for me, the H3 comes pretty damn close. And by the way, every time I look at my Hummer standing out in a parking lot, I can't keep that ear-to-ear grin off my face.
