Proof that you can keep a SW system healthy in a 3 gallon picotope. This is my build thread for my picotope reef, mentioned in my earlier post. Page three shows the last photos of the system before breaking down the tank for a move. Unfortunately the tank is not set back up yet. The options for a tank this size are endless if you are willing to do the required work.
I had actually considered doing a pair of dwarf seahorses in this tank. Using the stock filter and light you could probably do it. Just be aware that the stock filter is pretty weak and I don't know that I have seen any successful systems using the stock filter. Mine would clog and stop working if I looked at it wrong.
Also, in a tank this size you will only be able to keep a couple of small fish. I personally like Catalina gobies. They are small, colorful, and have lots of personality. They are a colder water species though, so you would have to be careful to select only inhabitants that can survive in the colder water with them. There are some corals and macro algae that would make an awesome tank for these gobies.
Again good luck, and I look forward to seeing what you end up doing with this tank.