We have always done a few long car trips a year with our kids, and have never done movies or video games. When the kids were the age your kids are now we relied heavily on CD books from the library. Try the Magic Tree House books, Harry Potter, and the Lion, the Witch, and the Wardrobe. We would grab a huge stack of book CDs each time, and there would always be at least one that really grabbed the kids and kept them listening for hours. For the time in between audio books, we would pack a bag for each kid with a clipboard, blank paper, lots of pencils, crayons, markers, etc. Your three year old is probably too young for this right now, but I also printed out blank map outlines (you can find online) of the U.S. and the kids could use them to quiz each other on state names, color in a state once they saw a license plate from that state, write in state capitals, etc. Sometimes we would buy those 'invisible ink' booklets that come with a special marker that reveals the answer to a question. We would also put loads of snacks in the kids' bags.
We also played lots of 20 Questions. Once our five year old set us all laughing hysterically by asking very seriously on his first question "Does it have tentacles?" We also played lots of Fortunately/Unfortunately. With that one, one person starts by saying something like "Unfortunately, John's car broke down." The next person continues the story with a 'Fortunately', saying something like 'Fortunately, John was able to walk to a nearby town." Next person: "Unfortunately, the townspeople there were zombies." You get the idea. :)