The second level (L2) is present in many higher end and some mid-level vehicles today, known as "active-cruise control" or "collision detection/warning". This is basically cruise control, with an additional front object detection sensor that detects other cars in front. This sensor allows the car to automatically brake should the car in front slow down to a speed less than the cruise control setting, and to speed back up to the speed setting when the car in front has sped up sufficiently or is no longer in front. In essence controlling the Gas and Brake Pedal for the driver.
L3 vehicles use a series of environment sensors, such as cameras, to detect the lane markings or the road edges along with cars in front and around to also control the steering wheel. At this level the car can cruise in its lane with no input from the driver. In essence taking control of the gas & brake pedal as well as the steering wheel. At this level the driver is still involved in driving by making turns and navigating to the destination, but takes a more advisory/monitoring role, especially on long straight stretches of the road & highway.
Level 4 is the holy grail, you get in the car, you tell it your destination and you can pretty much sleep, play or mind your own business, while the car drives the entire way there. This level of automation while technically possible, is extremely expensive and so the ownership model will not be the first mode in which we see these cars.
Take a peak at our prototype, we took a traditional car, the 2008 subaru forester, and by installing LaneCruise given it L3 self-driving capability.