I agree with tristan here, I can't see any real point why you should know where exactly the first three racers are. The only useful information would be a different colour for all cars one lap or more behind you.
You don't really need a seperate colour for cars a lap up on you either as that's what the blue flag is for. I mean it won't specifically tell you a car is a lap up but all you really need to know is that you should let them past.

Too much info already! Maybe just a green dot for the current leader only, but different colours for 1st, 2nd, 3rd? No thanks.

Green for leader.
Yellow for cars ahead of you.
Red for cars behind you.
Thats enough.
Oh, maybe a blue one for XCNuse.

I'd prefer to see position number next to the blobs on the map, as well as position number next to the name over the car. That would make sense.

Quote from SabersKunk :

I'd prefer to see position number next to the blobs on the map, as well as position number next to the name over the car. That would make sense.

That could work, if the numbers on the map were clear enough. I would just like to know who is directly behind me (position wise not track wise) and who is in front of me. I don't think it matters about the other cars until they are either a threat to you or your next target!

EDIT: After more thought, I think the car directly in front and directly behind should be a darker or lighter shade of the colour system that is already used.