Cooper Discoverer AT3
 

I am considering this tire in 265/75/16, Load Range E for my D2. I do mostly highway driving, but would like a tire that will perform well when I do go offroad. Anyone have experience with the AT3?

Also considering the General Grabber AT2.

By E rated I assume you mean Load Range E, there is no 'E' speed rating.
How well they perform off-road depends on where you off-road.
I have the Pep Boys branded version made by Cooper on my 4WD F-250. They do ok in light mud, but if it's really slick or deep I wouldn't count on them to not get stuck. I have no qualms in dirt, gravel, rocks down trees and the like.

Yes, Load Range E. Plenty of mud in the south, but I usually try to avoid deep mud.

I have 18" Comet wheels now, but also have a set of 16" Mirage wheels. So I am also trying to decide between 265/75/16 or 275/65/18. I think the comets look better so I am leaning toward sticking with the 18's.

Off road you want as much rubber as possible between the wheel and the rocks.

Yes, of course. Just weighing the amount of time i spend on-road vs off-road. The 32's on 16's is probably the best all around option.

I've been running 32's on 16" wheels for close to 40 years. Never found myself wishing for 18" wheels.

I guess it's just because they came on the truck and look good. Had the truck came with 16's I wouldn't even consider 18's. Another upside to 16's..cheaper tires.