I know, its freaky.

I think the problem is that the expression "third world" is used in two different ways. In its original sense, if I am not mistaken, Mao Tse-Tsung used to refer to countries that were poor and were not part of either the US or the USSR spheres of influence: India, Aftica, much of Latin America, and China itself. So in this scheme, the US/USSR and associated allies are the first two worlds, and everybody else is the third world.

Later people started using the term more in its current sense, indepenedent of the old cold-war US/USSR rivalry. But they didn't really bother to come up with a clear definition of the second world under this schema. In this system, the rich developed world (presumably G-7 nations) is the first world, the poor countries are the third world...but who is the second world? Excacty, its sort of left undefined.

At least that's my understanding of it.