A.G.
E.,
Fear not...he will learn. My advice is simply relax. My oldest son learned to deal with #2 when he started daycare at 3 1/2 years old. He wouldn't go at school, he refused at home, and then held it completely for a week. We went to the doctor who prescribed some medication and within another week he was done. Each kid is different and will decide when they are ready to do it. Stressing will only prolong the problem and make you both more stubborn.
Maybe talking to your mom about the importance of keeping him in his big boy underwear will help. Really ask her as a means of helping him understand that now that he's switched to big boy pants, it's for always.
Also, don't make the potty thing such a big deal. It's part of being a person so maybe tone back the praise a little bit. He'll learn that what we do when we have to go is to do it in the potty.
Or, if you are extremely patient and have lots of time on your hands, you could try what my husband did with our second son. About a half hour after meals he sat Jake on the potty until he went. Jake looked at a book or played with a car but sat on the pot until he went. Of course, my husband is extremely patient in that area and was home with the boys at that time.
Hope that helps a little.
A.
PS most kids aren't potty trained by 3, their parents are.