Actually, there are four levels, not three. Screen off, reduced brightness (in subdued light), normal or the 100% level (for bright light conditions) and a level above this only accessable by pressing the light button when at the 100% level.
You can test this by, in a well lit room, shading the upper portion of the 8700 screen for about 15 seconds and watching the screen dim. Remove the shading and the level will return to the bright level then at this level press the button and see extra bright screen.
Hope this helps.