<ul><li>In a 3-bit integer system, initially representing only positive numbers allowed for 8 numbers from 0 to 7.</li><li>To represent negative integers in a 3-bit system, three methods were discussed: using the leftmost bit for sign (problems with dual representation of 0), 1's compliment (fixes dual representation but has overflow issues), and two's compliment.</li><li>Two's compliment method involves calculating 1's compliment and adding 1 to it, allowing for a single representation of 0 and enabling proper subtraction operations.</li><li>Two's compliment is preferred as it utilizes all 8 permutations in a 3-bit system, resolves the issue of dual representation of 0, and facilitates subtraction operations similar to binary addition.</li></ul>

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