The answer: first 1, then 2.

alert( alert(1) || 2 || alert(3) );

The call to alert does not return a value. Or, in other words, it returns undefined.

1. The first OR || evaluates its left operand alert(1). That shows the first message with 1.
2. The alert returns undefined, so OR goes on to the second operand searching for a truthy value.
3. The second operand 2 is truthy, so the execution is halted, 2 is returned and then shown by the outer alert.

There will be no 3, because the evaluation does not reach alert(3).