Precision Mode is an unlockable cheat for the game. Basically, when playing normally you have roughly half-a-second before a note comes across the bar to hit it on your controller. In Precision Mode that half-a-second disappears and you must hit the note exactly when it comes across your bar.

More information and how to unlock the cheat:
http://www.mahalo.com/Guitar_Hero_3_Precision_Mode
Source(s):
Mahalo

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