I'm having problems finding out what the "avgqu-sz" is all about, I can guess, but would rather not. I was going to say I don't have iostat installed and can't read the man pages, but that's a crock, google can pull up any man page, just... I don't think the ones I'm finding are as recent or robust as yours.
Based on the first paragraph of iostat's description, I would tend to think you may be interpreting the first line wrong. To me, it would seem the intervals of the partitions are the lines that tell the story as to how much bandwidth saturation your drives have. And I don't think the await and svctm figures are all that bad, probably normal because hard drives are near the bottom of the memory pyramid, and not all drives have the same access time, cheaper drives can have an access time three times that of an expensive line. According to the intervals, the drive's partitions activity are quite minimal:
The iostat utility iteratively reports terminal, disk, and
tape I/O activity, as well as CPU utilization. The first
line of output is for all time since boot; each subsequent
line is for the prior interval only.
Is /dev/hda3 a /home partition, or swap? Because if it is only doing "read ahead", the nice level may be low as it's only stacking data into ram for future use, not for immediate use, which could explain the 73 and 44KB/sec.