How does this compare to SH3 (which I enjoyed)?
Controls and basic setup the same?
Controls and basic setup are the same. Graphics are improved considerably, and they changed up how crew management works. Now your crew works in shifts that automatically switch every so often allowing your guys to rest and such, and when you need everyone, you can sound battlestations and roust everyone out of their bunks.
Unpatched, the game has serious, serious issues, which make it more of a headache to play than SH III was. Patched even to 1.1, the game improves considerably, and by 1.4, I was regarding it as superior to it's ancestor. One change on 1.4 changes the distance ships render at, making it possible to track them visually even when all you can see is little parts poking above the horizon...something I haven't see since Aces of the Deep, and that makes penetrating a convoy both more doable and more of a nail-biter (hard to explain).
One thing it's important to note is that the setting changes things a lot. Unlike SH III, you're not generally operating out of bases where you're subject to air attack as soon as you leave dock, and there can be some long transit times to your patrol zone (thankfully made bearable by much higher time compression). You're operating against the Japanese, which means no 'mega-convoys', and while the AI, when you actually do find an expert destroyer, is sufficient, most of the escorts you run in too aren't that bright. ASW was not the Japanese Navy's forte.
The boats are different too. They're bigger, can't dive as deep, and are not as maneuverable as a Type VII U-Boat. Once you get used to that, you likely won't care: They have much greater firepower, higher 'stock' speeds, seem a bit more resilient, etc. It's like comparing a Euro roadster with a V-6 to a big ass American muscle car.
Career mode has some small changes. It's still a dynamic, free-roaming campaign, but you can be assigned objectives other than simply patrolling a certain section of ocean. Lifeguard duty, insertion of supplies or commandos, and photo recon are the main three, in addition to the usual 'sink the enemy' thing. While you get renown for ships you put on the bottom, the admiral likes it when you actually carry out your mission objectives, though I'm fuzzy on whether that translates to more renown or a better chance of a promotion or assignment to another boat. You don't 'buy' your next U-Boat as in III...they give you a chance to trade up instead, and conning tower refits happen in a similar way. AA armament, deck guns, radar, torpedoes and crew are all still purchased with renown, however.
Anyway, if you enjoyed SH III, I strongly recommend you give it a try, though I also recommend you patch it up to 1.4 as soon as it's installed. There are also some awesome mods available.