I've never seen the third installment, will have to watch it as this is the only Halloween film I've not yet seen.
As people have said, Carpenter's intention was to create seperate stories in the Halloween series, each having their own demon/villain, like Myers was in the first 2 films. Carpenter only reluctantly wrote the script for Halloween 2 and refused to get involved in any of the future Halloween films as Moustapha Akkad wanted to resurrect the Michael Myers character, which Carpenter didn't want to do.
A pity really, although I don't think Halloween 4 is all that bad really. It has it's good and bad bits, but it's not half as bad as some people say it is. Halloween's 5 and 6 where far far worse.