Your child's improving language skills, combined with his increased attention span, makes sustained conversations possible at age three. And the more conversation, the better. Your modeling of good language skills is more important than ever. So no matter how your child constructs a sentence or creates new words, try to respond with proper grammar and vocabulary.
You can talk about anything and everything with a three-year-old. You no longer need to confine yourself to talking about the immediate present. You also can now talk about the past, about the future, about things in the realm of the mind (yours or your child's). In short, you can talk not only about facts, but about ideas.
Your child needs you to hold real conversations with him, though. When your preschooler starts to talk a mile a minute— stuttering, stammering, and repeating himself again and again as he struggles to find the right words—it may be tempting to just nod and say, "Uh-huh." But if you do, your child will know that you're not really listening to him. Now that your child is three, conversation needs to be a two-way street.
Certainly, you will want to fill your preschooler's head with ideas and observations that are important to you. But at this age, your child wants to do the same thing to you. So try to avoid talking nonstop yourself and listen—really listen—to what your child is trying to tell you.
Instead of talking in simple shorthand, which may have been more appropriate for him when he was a toddler, you should now express complete ideas. Indeed, elaborate on the ideas that you might only have sketched at an earlier age. For example, instead of just saying, "I'll get it," say, "Let me help you get that box. It's on a high shelf and I can reach it more easily because I'm taller than you are."
If you speak in shorthand, all the language you'll offer your child is the word "get." But if you take the time and make the effort to cover all the details, you'll provide words that convey the ideas "help," "get," "box," "high," "shelf," "reach," and "taller." If you speak this way throughout your day-to-day life together, you will introduce or familiarize your child with words that convey ideas about shape, size, color, number, and action.