From the Leupold Website:
What is the difference between Vari-X II and Vari- X III?
All Vari-X III models have Multicoat 4 lens coating for enhanced light transmission (about 8 to 10% more than Vari-X II, which has lenses fully coated with magnesium fluoride).
All Vari-X III models feature 1\4 minute of angle clicks in the windage and elevation adjustments. The Vari-X II models all use a reliable friction type adjustment.
A range estimating is featured on selected models of the Vari-X III 1.75-6x32mm, 2.5-8x36mm, 3.5-10 and 4.5-14 (both 40mm and 50 mm) scopes.
The Vari-X II scope, while being an older design, is superbly engineered and still sets the scope industry standard for ruggedness, reliability, and quality in rifle scopes.
Both Vari-X II and III models share the same high mechanical and optical performance standards, and the same close tolerances in manufacturing for precise operation.
Both models are tested identically to meet the same rigid mechanical and optical specifications.
These scopes also share no internal parts.
Good Luck