Once the stage is downloaded, extract the contents with the following command, substituting in the actual name of your stage 3 tarball:

# tar xpf stage3-latest.tar.xz

It is very important to use tar's "p" option when extracting the Stage 3 tarball - it tells tar to preserve any permissions and ownership that exist within the archive. Without this option, your Funtoo Linux filesystem permissions will be incorrect.