Hi Tim,
Welcome to the forum.
I'm no Otari expert and hopefully one will chime in to be more specific.
It seems that most of the difference between the two models is more in the bells and whistles such as auto seek. After working on a Mklll, I have to admit that these automated features are very cool but they're still more of a convenience.
On the practical side, most Mkll's are 4 head machines that records and plays back 2 track stereo (1/2 track) but also plays back in 1/4 track which most prerecorded tapes from the mid 60's onward are recorded as.
On the Mklll, the 4th 1/4 track head was an option and I've seen very few that have this option.
If you're in the market for an Otari, take your time. There are tons of them out there and price doesn't always track condition. I've seen mint machines for less than $200 while I've seen total train wrecks for close to a grand.
There are lots of posts regarding these machines so use the Search.
If you check out the Links sticky (which resides above the General forum), there are links to repair/maintenance and pdf. files of the manuals.