I ride a 3-speed as my primary bike (Sturmey-Archer AG). I converted my existing bike from a derailleur setup. It already had horizontal dropouts so chain tensioning isn't a problem, and I was able to route the shift cable under the bottom bracket as with the old RD. I have it set up so that 3rd gear is my level-ground gear, with 1st and 2nd used for hill climbing and acceleration. This gives a useful low gear in exchange for having to coast down steep hills, which to me is far better than the alternative of struggling up that steep hill on the way home. The steps between gears are fairly wide, but with practice you will find yourself with a wide enough 'power band' that this isn't really an issue.