I agree that third year is SO much better than the first two. I still read up on cases that I have seen during the day on my rotations, but I don't do any intense studying. I have been lucky in that my rotations so far have been 9-5 (psych, family practice, and medicine). Until I got to my surgery rotation, of course (which I am in now) - hours from 5:45-5 or 6. Rotations are so much better because you are actually getting some hands-on experience and seeing in person the disease processes that you had before only read about in textbooks (unless you had another career in medicine before med school, of course).
And although I love being on rotations, there are days that I ask myself, "Why am I doing this to myself?" I think all of us go through that, and then something happens that makes us realize that there isn't any other thing we'd rather be doing.
As for me knowing what I want to do, I am about 90% sure of what I want to do. But I am trying to keep an open mind throughout this third year and then make a decision based on my experiences throughout the year.