Extremely mediocre.
Like the fact that in most the races (bar one actually) that I've driven you can't change car. What if I HATE the Honda NSX? (which incidentally I do) It's a bit demoralizing to be forced into a car you just can't stand. This is a -massive- problem in my opinion. They make a game that is obviously made for car enthusiasts, then they overlook the fact that it's a game made for car enthusiasts... Anyone else see the faulty logic? Everyone who knows anything about anything knows that car enthusiasts are VERY particular about the cars they like and don't like. The game might be made FOR enthusiasts, but the makers themselves obviously aren't.
Another example of developer errors is the actual physics for anything other than tarmac races. Dirt races, wether it's rally or baja-buggies have totally horrible physics. I've driven most vehicles that run off-road, and NONE of them has behaved the way the dirt vehicles in TOCA3 does. It's completely unplayable.
Thirdly, I want to point to the qualifying laps. If your car is even remotely off track you get a message telling you "You have recieved a penalty for being off the track and gaining advantage" or something similar. Even though the piece of the proverbial you are driving understeered you right off a hairpin, made you spin pirouettes in the sandbox and LOSE 20 seconds you get this message. Now, the message in itself isn't so bad, but the fact that your WHOLE lap is disqualified is STUPID. I mean. Most of the time, taking your car for a stroll off the track is a DEFINITE DISADVANTAGE, not an advantage. IT'S STUPID!