Haven't seen it yet but i just got the original twin peaks dvds for a couple of dollars so ill catch the new ones after these

I was pretty glad when I heard they made a third season, but I remember not even finishing S2 due to the mystery of S1 being sold.

Do I need to watch S2 to enjoy S3? Or maybe I should even give S2 another chance now that it's been a few years.

You should know how S2 ends at least because S2 ends on a cliffhanger involving Coop that S3 picks up. And maybe give S2 a second chance while fast-forwarding through every scene with James in it, because he has no impact on anything else and eventually just leaves.

The second half of season 2 was kind of a letdown. The finale, however, was spectacular, and without knowing how season 2 ended, season 3 won't make much sense.

If you don't feel like watching it, you can read the summary on Wikipedia, though, that should give enough information to make sense of season 3 - to the degree that's possible, at least, we are talking about David Lynch here, after all. ;-)

Just be aware that the third season has a much stronger Lynch-ean flavor to it. Which is great if you're fan of his work (I know I am), but it might not be for everyone.