Would like to see some impressions of the difference.
As of now, only preliminary impression since these can change as my ears adjust to the FX850 (though I doubt the change will be that dramatic ):
+Bass: FX850 is has more impact, more emphasized and tighter more controlled even with the tape mod for the H3. The H3 does seem to extend a bit lower in the sub-bass region though, as it does have a larger 16mm dedicated sub-woofer (this I need to check again). I still prefer the FX850 bass overall.
+Mid: FX850 is more forward, slightly in your face, more lush and fuller sounding. Vocal tracks, piano-vocal duet...are clearly the FX850's forte. The H3 in comparison is more veiled, a bit dryer, no doubt about that. That is not to say the mid of the H3 is bad, just slightly veiled for a BA iem, in fact I would even say that its mid give the H3 an advantage in the sound across the board (I will get to that below)
+Treble: At last, people who are sensitive to sibilance can rest assure: no harshness found in either iems (coming from a guy who found the mdr-7550's treble harsh). Both are very capable when comes to the treble. Though I noticed the FX850 is a bit brighter with that nice sparkle and shimmer we all want, all without the harshness.
+Sound-stage: To my ear the H3 seems to have a bit more space and air compared to the FX850, this is probably due to the slightly veiled mid-range of the H3, which seems to give the entire sound that bit of space. IMO, this is one of the advantage of the veiled mid of the H3. Perhaps someone could weigh in on this? I myself don't see how the FX850 can have more space due to that slightly forward mid range.
+Separation: gotta hand this to the H3, as expected of the BA driver. Once again, the veil mid of the H3 means that you can turn the volume up and listen to all these instruments in the background without guarding that volume button from the unexpected loudness of the vocal. This is probably what someone from the XBA forum mentioned as a "non-fatiguing sound, that protects your hearing" lol. I often have to tune down the volume on the FX850 as they tend to get loud quite quickly in a certain section of the song (of course this only happen if your volume control are not precise, like the 15 levels volume control on android phones. To combat this, I found a precise volume app with 100 volume levels to adjust from). Separation on the FX850, I think, is as expected of a capable dynamic driver, very good, not bad but not super brilliant either.
Lee, Eric, Dsnuts or anybody else can pitch in?