Just got my YouRock Guitar today!  I've never had so much fun with a music game.  This is the best way to play RB3 pro guitar mode, IMHO.

The YouRock Guitar is a midi guitar that retails for $200.  This guitar was designed as an inexpensive, portable midi guitar-- the RB3 functionality was added later.  The guitar neck can detach, and the whole item can easily fit into a backpack.  The only difference between this and a real guitar is that there are no tuning pegs and no strings on the neck.  In place of the strings are little fixed nylon cords that run the length of the neck.  These nylon cords help one locate the proper hand positioning and give a similar feel to a real guitar.  The only major difference I noted is the You Rock guitar cannot readily do pull-offs and string bends.  Everything else feels legit and the sound is really great for a $200 model. 

I found that it is very easy to learn a song from RB3 on the You Rock and later play it out on another acoustic/electric guitar.  For those of you musicians out there, I can't recommend this thing enough.  Playing with RB3 might be one of my most enjoyable experiences of this video game generation.  It is expensive, I know (especially because you also have to buy the $39.99 MIDI adapter and a $5 MIDI cable).  I have actually been saving up for this thing for the last 3 months.  But it is worth it. It is more expensive than the mustang, but almost half as expensive than the Squier. 

I looked into buying the Squier, but I was kind of scared away by all the negative reports I was reading on the rockband.com forums.  Apparently the Squier can be difficult to calibrate and many people have returned their models because they can't get certain strings to register.  Some other people had to tinker for hours before they could get it to work right.  The Mustang, on the other hand, users buttons instead of strings and doesn't have any functionality outside of RB3. 

The You Rock guitar worked perfectly for me with no hassle.  I was playing it on RB3 within 5 minutes of opening the box.  The You Rock guitar has sensors in the frets so that RB3 so exactly what frets you are placing your fingers on.  I would recommend this to anyone who is interested in playing RB3 pro-guitar mode. It is a great starter guitar for beginners and a great 'extra' guitar for more seasoned players.  This guitar kills 2 birds with 1 stone for me because I wanted both a MIDI-guitar and a guitar I could play on RB3. 

Rockband 3 has dropped to $19.99 in price recently and they said they won't have a sequel in the next year,  so it is never too late to get into this game.  

A couple videos for you:

http://www.youtube.com/watch?v=o_u3BXbEzBU

http://www.youtube.com/watch?v=5cNJa4Eqpe4

Nice Rock Band 3 is one of the best ways you can learn how to play guitar.

I myself have the Squier guitar and it works perfectly for me.

Guitar is so frustratingly hard though :/