I see everything else and the only thing TFIII's graphics had going for it were parallax layers really. The wave effect thing was kind of nice, but I also thought it was kind of too fast and annoying. When you abuse dithering, it just looks ugly man.
i have to totally agree with keranu. though TFIII was one of my fav. shooters ever, especially regarded to its age ('90), it's just looking tiny against a Gate of thunder, which of course was released 2 years later!
TF IV looks awesome in the first stage only, impressive parallax etc. but is jerking a lot though. the coming levels really looking nice, but the facts keranu mentioned, puts the game much below the standard from the elite shmups on PC Engine like GoT, WoT Sapphire, which appearing in a much more shine & clear style (with all the droped shadows of the top and bottom obstacles in GoT, changeing the BG several times in each levels, huge and nice drawed explosions etc). for example in TFIII they made the mistake, that the explosions starts red in the core and getting yellow outside > horrible!
i mean really, in view of technically aspects a sapphire is above all of them (exept the SE).