Hi,
First off, I would not be inclined to name an object/subform "Item". It is very close to a reserved word "item".
Also in the addInstance() method, you should pass a parameter. The default is true.
One route would be to use the layout:ready event of the repeating subform. This is not very efficient, as the layout:ready event fires so often as the user interacts with the form. However it will deal with situations where rows are added and removed.
if (this.parent.index >= 3) {
this.fillColor = "255,129,129";
}
This might give you a start,
Niall