From behind the Gen III spoiler is flat while the Gen II spoiler is curved up in the middle. From every other angle they look totally different.
Yup I'd spot a gen3 right away by looking at the flat spoiler and its seemingly brighter rear brake lights.
To me, they're very easy to distinguish. The front is quite different, and the general shape of the car is also significantly different from the Gen II. I finally saw a new Honda Insight last week, and I had to look closely to distinguish it from a Gen II Prius. IMHO, those two cars are more similar in appearance than the Gen II and Gen III Priusses (Prii? Priora?).
I notice the forked headlights on Gen III vs non forked on Gen II, the Stubby gen III antenna vs the much longer whip antenna on gen II, both the rounder gas filler cover and rounder side mirrors of the gen III vs the more squared off of gen II. From the rear, the license plate sits higher on the gen II pushing the Toyota logo well into the lower hatchback glass, vs the just barely intruding logo of the gen III. I get the person above who just says the styling is different, but that is like you can recognize faces without being able to specify what is different. It works, but it is hard to articulate specifics about different facial features... composite mugshot artists have a really hard job.