I flashed with PR 1.2 with the command line flasher and then restored apps/settings/contacts from a backup. I have found the system to be much more responsive and haven't notice any major bugs after pretty heavy use the last couple of days.

A lot of general weirdness can accrue if you have used your N900 a lot since initial release, installed a lot of third party apps, etc. I would recommend flashing from scratch and restoring from backup afterwords. It hardly takes any longer than an OTA update and you are left with a pristine system.

I am sure that this release, like those previous, have quite a few bugs, I just haven't experienced any personally. The best thing to do to make sure they get fixed is to check bugzilla to see if the issue has been reported and then, if needed, create a bug report.