I think (Barry, feel free to correct me) what he means is that DOT 3 has a nasty habit of absorbing moisture from the air and causing lots of corrosion inside the brake system, eventually leaving lots of brown sludge. It seems to be much worse on LBCs because they aren't air tight, and even modern cars can absorb moisture eventually through the rubber hoses. If you use DOT 3, you'll need to change the fluid regularly. You might want to look at something like Castrol LMA (Moss Motors has it, I haven't seen it in stores), or Valvoline Synpower brake fluid, since both of those profess to be less prone to absorbing moisture. Those are OK to mix with DOT 3.
If you need to identify what you've already got, DOT 5 starts out purple, but may fade to something clear. If the fluid is amber or brown, it's DOT 3 or 4. If it's really dark brown, it's very old DOT 3 or 4.
