What I believe happened is that Obsidian began development with the gold version of KOTOR or perhaps even earlier. The post-release patches never made it into the code.
I strongly advise everyone having problems to POLITELY email Lucasarts and tell them in detail what bugs you're having. All support is routed through Lucasarts as the publisher and they alone control authorization and approval of a patch, even though Obsidian will be creating the patch. The more issues we bring to their attention early on, with coherent explanations, the greater the chances of them being fixed.
Bugs and lacking features I have noted include:
BUGS:
Fix of 'warp' bug when saving. If the main character is moving at all when you save or open the preferences screen, they can shoot forward as if they never stopped moving. This happened also in the original KOTOR, but in the original, it also happened in area transitions, which I haven't seen yet in KOTOR 2.
Pazaak bug on Telos: When you are taught Pazaak, it is impossible to click 'End Hand'. Normal Pazaak games do not have this problem. Music and movies that should not be unlocked yet are available in a new game, causing plot spoilers.
Cut scenes often cut abruptly, ignoring the last seconds of the cut scene and obscuring in-game dialog immediately following. This issue did not occur in KOTOR 1.
Swoop racing is bugged, at least on Telos. No matter how fast you race, the game tells you you have beaten none of the track records. The racing itself works fine, but you can't win.
FEATURE REQUESTS:
Small Font option ala KOTOR 1. The font and UI are really huge at 800x600 and pretty big even at 1024x786 and 1280x960. 1600x1200 is decent.
Fix eyeballs and insides of mouth being visible through the skin of holograms..it's disturbing.
Sharper Textures! Game looks blurry in places, even with Anisotropy set high and AA set low. Having an option for users with high-end systems would be nice. For an example, check out the texture on a protocol droid during a conversation. It's very blocky and blurry.
When you change the attack stance mode, nothing happens until you click it to set the mode. An indicator would help people notice they need to click it.
Music and movies that should not be unlocked yet are available in a new game, causing plot spoilers.
Indicators for what effects a character is under, as in the original KOTOR would be VERY helpful. Example: Adrenal Alacrity and the icon that shows in the Character Info screen.
An indicator that shows influence with a party member ala the Light/Dark meter would be VERY helpful.
An extra combat difficulty level or two for experienced players. Combat in the game, even set to 'Difficult', is too easy.
Add a Walk key. This was added in one of the first patches to KOTOR 1 and KOTOR 2 even refers to walking, yet you cannot do so. Very lame.
You should be able to switch between upgrading and creating/breaking down at a workbench without quitting and using the workbench again.
Allow refresh rates of 100Hz and 120Hz if monitor supports them at that resolution.
PERFORMANCE/STABILITY TIPS:
If you're having frame buffer issues on an ATI video card, you can either replace the atioglxx.dll with one from the 4.2 - 4.11 range of Catalysts, or if you don't care about the effects and just want to fix performance, you can disable Frame Buffer Effects in the game and add the line Disable Vertex Buffer Objects=1
Under the [Graphics Options] section. This should increase performance greatly.
Turn off Soft Shadows on all ATI cards..it's a massive FPS hit, even on X800 series cards. Not sure if there is a bug or if the hardware is not optimized for the effect.
To reduce the FPS hit in busy or smoky areas, reduce or disable AA, and if possible, enable Temporal AA for higher/equal quality at a lower cost.
Do NOT alt-tab away from the game if you can help it. Obsidian and Lucasarts officially label the game as 'unstable' if you do so, and I've confirmed this. I can have 70FPS, alt-tab away, and come back to find the game locked into 2 or 3 FPS until I quit and restart the game.
If you DO find the game becoming choppy, reset the graphics engine by disabling/enabling Frame Buffer Effects or changing the levels of AA or Anisotropy. This will allow you to play at normal speed again.