What is the 3, 2, 1, gears for on the shifter for?

If its like other shifters, its to keep a lock on the maximum possible gear. So in 1, you can only use 1st gear. In 2, you can use 1st and 2nd. In 3, you can use 1st, 2nd, and 3rd.

Isn't 1st gear for going down hills and 2nd gear for going up hills? and what other purpose can I use 1,2,3 gears when I put it in 3rd gear the car seems to speed up quicker

Pretty much leave them alone, how often are you going down a hill fast enough that you want to slow down? The only time I've ever used a lower gear was towing my elky up a hill in an 00' S-10. That was to stop it from going 3-4-3-4-3 and messing stuff up.

never heard of dropping it in 1'st to go down a hill, i think that would just raise your rpms and ride out the gears and whine like a sum bitch. 2'nd for climbing hills or mountains where the speed limit is only like below 50mph. And the 3-4-3-4-3-4 deal is a great choice to keep it in 2'nd. So that way your over drive clutchs are being stripped out and worn to the max. The reason why i shift 1-2-D on my TH350 is for racing purposes.

-Anduh