There have been three generations of testnet. Testnet2 was just the first testnet reset with a different genesis block, because people were starting to trade testnet coins for real money. Testnet3 is the current test network. It was introduced with the 0.7 release, introduced a third genesis block, a new rule to avoid the "difficulty was too high, is now too low, and transactions take too long to verify" problem, and contains blocks with edge-case transactions designed to test implementation compatibility.
I'm interested to know about Testnet(1) and Testnet2: the differences, the reason each version was deprecated (in particular, how/why people were selling TBTCs). I'm interested in the "historical context" as much as I am technical reasons for changing to a new Testnet version.