3 transformations is really pushing it. I understand it for a couple of characters, like frieza, because his transformations are not exceedingly powerful, but you are going to start getting nuts if you give all of the saiyans more and more transformations. Here's how it would have to work to balance that out:
After each additional transformation (after the first) the previous form should become the permanant starting form for the character, and the next transformation should remain optional like with the current system. That way Saiyans wouldn't have the ultimate advantage of losing no PL at death because their base form is the only PL taken into account when they are being averaged with the server. They would still have an overwhelming power level advantage, but not nearly as badly.
Next, speeds would have to be handled differently. If you have 3 transformations and your speed increases 3 times you'll all be at least as fast as Krillin which will get way out of hand. For characters like Saiyans, there is the possibility of making it some kind of option whether they want to go either Ssj2 or Ussj until they recieve their final transformations, so as to kill two birds with one stone, and not have to give them extra bonuses for stacked transformations (USSJ stacked on SSj2 wouldn't make sense). That way you'd only have to raise the speed for Ssj2 but reduce the amount of life, or whatever.
Another issue would be ki. I'd say the suggestion that SSj3 should drain ki like you were in base form is a good idea considering how strenuous it is supposed to be, and I support it. What about Ssj2? If you keep increasing ki you're just going to make melee more and more annoying. The less people stop to charge up the easier it is to run away and the less vulnarable everybody is. Powering up should be an important tactical manoeuver(sp?).
The next issue is TIME LIMITS. Right now you need at least a 30 minute time limit for most Gokus to hit SSj. SSj3? Give me a break. Unless you are going to change the default time limit in the server side scripts you include in the installer you are going to have to bring down those PL requirements big time. Problem is, the more you bring them down, the more balancing you have to do with them, so that somebody who is just good and beats on people for 20 minutes doesn't end up hitting SSj3 while other people are struggling with SSj. It'll only make it easier for pros to become invulnarable on public servers, and those transformations really wont even have a place in real clan matches. Who is going to go "Ok, you kill me 30 times and hit SSj3 then I'll kill you 20 times and go SSj3 and then we'll fight." ? Nobody. So really it'll be mainly used on the pubs, which means you will need balance.
Things are acceptable as they are right now. Everybody thinks new transformations will be great because they like having the illusion that they are becoming massively more powerful. The truth is there is already a horrible imbalance between transformed characters and those who are not, and the more transformations you tack on, the wider that gap will spread. The faster people go, the more people will complain about melee, and the more our pings and latency will play into split second melee decisions. The more ki people have and the bigger the attacks, the more beam spam to ***** about and the more teleporting to easily piss off attackers by evading them for minutes at a time due to the imbalance of teleportation cost and powerup time.
So think about this stuff before you decide that 3 to 4 transformations per character is really necessary. You may end up changing your mind. Sure, it would look cool, but maybe it should be more of just a model change, and less of a big deal than people are making it out to be.