The Nullsoft division of AOL has called Winamp 3 off, discontinuing all further development. It is said the future of Winamp lies in version 5, while for now they plan on returning to enhancing Winamp 2.
The major complaint with Winamp 3 was the lack of speed. This was caused mainly by a new object oriented development language called Wasabi that allowed developers to create a wide variety of things, practically anything.
Winamp was famous because it was small, fast, and easy. Winamp 3 was virtually the opposite.
Winamp 3's skinning engine, however, will make its debut to Winamp 2 soon.