Even after the release of v1.0 TDM and the subsequent updates, there are plenty of incomplete features and potential bugs. Chances are, we're aware of most of them already. Here is a list of common bugs or incomplete features that players may encounter:
My Screen is Upside Down!
Turn off HDR-Lite Post-Processing from the Settings Menu or preferably disable Catalyst AI in your Catalyst Control Panel.
One significant annoyance with D3 physics is that a moving object cannot propagate impulses from one object to another. In other words, while a moving object (like a door) can push a movable object out of the way, if that movable object hits *another* movable object, it will stop. That means that a door can move a crate out of the way, but if that crate hits a spoon, the crate and door will stop moving. It also means that if you put a spoon on top of a movable crate on an elevator, the elevator will not move up (spoon blocks crate which blocks elevator).
This is probably the biggest irritation with D3 physics. The issue is potentially fixable but it's not an easy task.
Sleeping behaviour is still a bit rough around the edges. AI sometimes fall through the floor when getting up off a bed. (should be fixed in 2.0)
AI occasionally try to search at a point beyond a solid wall (usually as a result of a thrown object). This can cause unusual behaviour, like running into the wall or running away to a different part of the map. When AI run into a wall, they sometimes clip into the floor (which doesn't cause any problems but looks even worse than just running into the wall normally). (happens far less frequently as of 1.08)
AI sometimes go through each other or (even worse) stand overlapping each other. This is a last resort to avoid AI endlessly treadmilling into each other or not being able to get past.
There is a bug with combat that sometimes results in the AI not drawing his weapon properly. This might show up as an AI attacking with an empty hand (but still parrying and doing damage), or the AI might just run into the player continually, unable to attack at all. (fixed in 2.0)