3 states" refers to the fact that you can set the output pins as either high, low or "high impedance." Unlike the HIGH and LOW states, you can"t set pins to their high impedance state individually. You can only set the whole chip together. This is a pretty specialized thing to do -- Think of an LED array that might need to be controlled by completely different microcontrollers depending on a specific mode setting built into your project. Neither example takes advantage of this feature and you won"t usually need to worry about getting a chip that has it.