I am in the middle of tackling this problem on my own recently acquired used L3400. Be sure you try the machine out in the yard (with an implement) and see how it is before you take delivery.
For those not familiar with this problem, it is well covered in other tractor forums. The OP is referring to the jerky Position Control Valve used on the L2800/L3400 models that did not have the optional draft control. (The units with draft control got a better position control valve.)
http://www.youtube.com/watch?v=Y4F_IjO1YFw&feature=related
http://www.youtube.com/watch?v=AS5VN8McI2Y
The problem appears to be a combination of too high a rate of hydraulic fluid flow into the 3PH lift cylinder, poor CV proportional response (more like all or nothing), and a large hysteresis in the control valve itself causing the 3PH to jump up in discrete steps of 1" (and overshoot its set point via momentum and then bounce back). With a heavy implement on the back it can get quite scary and violent bouncing the whole tractor.
As per the parts book, Kubota used 4 different control valves on that tractor throughout the model run. They vary quite a bit in smoothness, and I'm not sure how good the latest ones are. Mine is an older L3400 with the original control valve.
Try your tractor out first and see how it is. If it is problematic, you can find out using the parts book and serial number which control valve you have.
To upgrade, you will to swap out the control valve for part# 31351-39604 which costs about $450.
The end result is a smoother operation (though still twitchy), with the 3PH response being small jumps of about 1/4". It still won't be quite as smooth as most other tractors, but good enough.
http://www.youtube.com/watch?v=KsUFc5KesF8