Ah, an easy one ! Let me tell you exactly how to do it. GTA3 was rumored to use safedisc 3 but I'm not sure if that's true. Anyway, the first and only official patch ripped out the safedisc protection because they had too many complaints about it. So if you install patch 1.1, you can use it with any half decent backup cd. There are 1.1 nocd's available
here if you want to play without any cd. You can include that crack on the backup cd if you like. But if you want to play without the cd, you also have to copy the subdirectory "audio" on cd 2 to the game directory on the hard disk, like "C:\Program Files\Rockstar Games\GTAIII\Audio\". Lastly, if you want to make an exact copy, I think Alcohol120% or Blindwrite work fine.