Wow, I guess they updated the CS&D! We were only allowed 2 personal items last year as doolies. AFrpaso is correct- watches, headphones, etc would not count towards the personal item limit.
Big items that you cannot fit inside your trunk or in overhead storage would count- like skis, snowboards, guitars, and also anything you put on your desk display board counts as one personal item (like, the whole thing is just counted as one so you can tack however many pictures and things on there as you want and it is just one personal item). Something large on your desk shelves that isn't books or school binders would also count as a personal item.
However, most squadrons do not care at all, and the worst would be losing a point on AMIs. For the formal SAMIs, people just tend to cram as much stuff as possible into their trunks, or you can give something to your 3 degree coach who can keep it for you if they aren't participating in the SAMI.