truncating the content output

Try replacing:

<?php the_content() ?>

with:

<?php the_excerpt();
<p><a href="<?php the_permalink();?>"><?php _e('read more &hellip;');</a></p>

Then edit functions.php and add:

// Custom excerpt length
function my_excerpt_length($length) {
	return 100; // Or whatever you want the length to be.
}
add_filter('excerpt_length', 'my_excerpt_length');

You have been a great help. I am actually a little confused why it is applying the truncate to the first post iteration but not the remaining ones.

<?php
    query_posts('cat=3&posts_per_page=3');
    if (have_posts()) :
        while (have_posts()) :
        the_post(); ?>
        <ul>
            <li>
                <a href="<?php the_permalink() ?>" rel="bookmark" title="Permanent Link to <?php the_title_attribute(); ?>"><?php the_title(); echo ": "; the_time(get_option('date_format')); ?></a><br />

                <?php
                    function my_excerpt_length($length) {
                    	return 15;
                    }
                    add_filter('excerpt_length', 'my_excerpt_length');
                ?>

                <?php the_excerpt(); ?>
        </li>
    </ul>
    <?php  endwhile;
    endif;
    wp_reset_query();
?>

AH HAH!!!

The function needed to be outside of the loop. Ofcourse.

My bad.

THANKSSSSSS

Move:

function my_excerpt_length($length) {
	return 15;
}
add_filter('excerpt_length', 'my_excerpt_length');

to functions.php and just use <?php the_excerpt();?> in your template file.