I know the thread which says that rebase is for small changes of teamMates, while merge for large changes.
I keep three Gits of three teammates in the following dire
Just some other thoughts to complete Samuel's answer.
Unlike SVN, branches and directories are completely unrelated in Git: having 3 branches (one for each member of the team) does not mean 3 directories. That is not what you meant in your question (since your directories are actually 3 roots for 3 Git repositories), but I prefer mention it explicitly just in case ;)
Git being DVCS, the 3 repositories can be anywhere (not in 3 directories on the same computer). If they are reachable through an UNC path (\\desktop\path\to\repo), they can be designated as remote.
Git clone does allow you to get references to remotes branches, but does not create tracking local branches allowing you to get the work of your colleagues. The ruby module "remote branches" can help.
Be wary of rebase as it rewrites the SHA-1 of your branch (since you replay your commits on top of another branch): if your teammates based their merges on your branches, they will have to merge all your commits every time, even those already merged!
It is best to have 2 branches in this case: