1. Drop the storyline. Basically, even if Epic took the time to do it right in a second installment, you're still starting off with something that's become a joke in the gaming community. Do a tournament ladder with actual depth to it, and leave it at that. And Xan should be the boss, Malcolm is not a good boss character.
Been a while since I've been to these forums.... but I wanted to say something about this.
I may get flamed for mentioning UC2 for the Xbox... but I think the campaign in that game was spot on how it should have been done in UT3. UC2 was an actual tournament for the single player mode, with an overarching story behind it.
Anubis sees Selket is trying for the Nahkti throne, and he enters the tournament to stop her from both achieving the throne and dying in the tournament (since the final match has the respawners turned off for the final kills-- the Nahkti tradition is to the actual death for the throne)-- because he does still love her but also knows she is pretty much evil to the core.
Over the course of the single player, you played in an actual tournament dealing with DM, TDM, CTF, and the UC2 specific modes of Overdose (which was a great game type, IMHO) and Nali Slaughter. It taught you the basics early on (jumping, UC2's melee, weapons and tactics), and got progressively harder by throwing mutators at you (instagib, low grav, etc.) and harder opponents.
UT3's campaign, though, is just a mish mash of TDM, CTF, vCTF, and Warzone with a non-sensical and utterly unimportant storyline behind it that gets bogged down by the complete inadequacy of your teammates' AI during the CTF, vCTF and Warzone game types (they do decent in TDM, though). Real shame then, that Epic decided to make the majority of the matches CTF, vCTF and Warzone. I basically refuse to finish the campaign on my 360 unless I am playing co-op because of the fact that my AI teammates are complete idiots.
A campaign/single player story mode shouldn't be just thrown out... But, at the same time, it should be well thought out and have a storyline that makes sense within the reasons for the tournament. I think UC2 was a step in the right direction for how a campaign can be done while still being a tournament.