The Type 2 receiver came out in response to the problems with the Type 1 receiver, which was a cobination of a stamped rear section and a milled forward section.
The Type 2 was the first all milled receiver, and it differs mainly in the way the buttstock is attached. The Type 3 has two tangs coming our from the back of the receiver that screws fit through to hold the buttstock. The Type 2 has a metal socket that sticks out the back of the receiver that holds the buttsock on.
I've seen pics of Type 2's still in service, particuarly in the mid-east and Afghanistan.
Type 1 receiver with the front milled and the rear portion is stamped:
Type 2 Receiver
And a Type 3 receiver, which is by far the most commonly encountered milled receiver. This is my Arsenal Inc. SA-M7 Classic with some Soviet 1950's era laminate on it. Took me forever to find a decent set. The pic isn't the best, sorry....