Oh, how I love pretend play with a three year old!! We have been having so much pretending we are ballerinas, doctor/nurse, grocery store employees/shoppers, clothing store employees/shoppers, dolphins, Wonder Pets (based on the TV show) saving all sorts of animals, people and trains from some sort of predicament and, well, anything that we can think of we will magically turn into during the course of a day!
After we are done with our pretend play we talk about it and create a story, which she loves to do. Sometimes at nap/bedtime we will talk about our story instead of reading a book, which is always fun because the story starts to evolve and morph into something else. We love watching her be so creative with the pretend play, I hope she doesn't grow out of this phase too soon!
A great book to go along with this pretend play is SkippyJonJones by Judith Schachner.