Tailwindcss v3 is a major upgrade compared to v2, with by default just-in-time building of CSS enabled (so its faster and only the code that you use is served to the user), extra colours, and more support for customizability such as custom values and targeting hover, focus and other states. You can see the full list here. In addition, the documentation for version 3 is dark themed, while for version 2 it is a hideous bright colour that hurts my eyes during my nightly tinker hours. That in itself is a good reason to upgrade.
So, Tailwind v3 is what we want, but getting that working with Nuxtjs V3 turned out to be a bit of a pain.
There is a package for Nuxt that easily integrates Tailwindcss with Nuxtjs, written by the Nuxtjs developers themselves, which you can find here. However, that only works for Tailwindcss v2. Update: they updated the Tailwind package for Nuxtjs to include Tailwind v3 support a week after I had this issue.. It's still in beta and I haven't tested it yet though.
After fiddling around a lot with their code, edits in the Nuxt config, and searching stack overflow, it turned out that the Tailwindcss guide works flawlessly for integrating Tailwindcss v3 and Nuxtjs v3. You can find the tutorial here.
