Could someone please explain, or link to the official wording of the Rule of Three?
Any help would be greatly appreciated. Thanks!

It's in the Danger Room rulebook, at the bottom of page 13:

One thing that we should all remember regarding the "rule of 3" and how it applies to damage value is this (since it comes up often):

When using an object w/super strength, the object adds to damage dealt, ergo it is not subject to the rule of three. FYI

In other words, you can perplex up a characters damage by three, say Magog, from 5 to 8, and then he can pick up the soda machine (which adds 3) and if he hits he would deal 11 clicks of penetrating damage (thanks to his Exploit Weakness).

Since we're on the subject, another thing that adds to damage dealt -- and would therefore not fall under the rule of 3 -- is the +1 damage from a critical hit.

Also damage from getting knocked off a roof or into a wall

Except that is techincally separate from the initial damage. Meaning, while your Hulk might get clocked for 5 by a Pouncing Spidey with a heavy object, the additional 1 or 2 damage dealt from the knockback that Spidey rolled would occur after the 5 damage... and if a damage reducing power or Combat Reflexes happens to be on the dial after taking those first 5 clicks, the damage dealt from falling off a building/into a wall will be reduced/ignored.

Thank you all. I was especially wondering how Magog could turn a 5 into an 11 damage. That's just horrendous damage!