The Pz. 38(t) was produced into 1942, far after being obsolete, and compared to Pz. III's, they were quite inferior in all parts except fuel consumption and profile size. They were only useful in the invasions of Poland and France for use as a MBT (even though such doctrine didn't exist at that time, that was their practical purpose).
Some problems of this German tank: hard and brittle armor, riveted turret and hull (points where plates meet are weak), flat armor, fairly underpowered gun for both hard and soft targets, exceptionally poor visibility.
We show two amazing videos. The first one in Kubinka 2009 and the second one on Militracks 2012