To me so far, this is quite possibly the most frustrating game I have ever played.  Specifically getting some of the challenges on the tracks...the AI seems to cheat.  Anyone else experiencing this?

I can only speak for the PSP version so-far, but Some of them do seem to take the more hidden shortcuts quite often. I guess after a few laps you get to know the track better, though. My biggest frustration is how some sections of the tracks make it too easy to mess up your driving line beyond repair or even land you far off the course. Not cool =( 
Other than that, though- I think it's still pretty good.

" To me so far, this is quite possibly the most frustrating game I have ever played.  Specifically getting some of the challenges on the tracks...the AI seems to cheat.  Anyone else experiencing this? "

Oh don't get me wrong...i love the game, just some of the challenges can get frustrating-more the having to finish first while doing it.

Sideswiping 3 guys on the cliff in fracture makes me angry!!!! GRrrrr!!!

I agree, this is totally frustrating. Losing the same race 4 times in a row because i get missile ransacked right before the finish line. But, still an amazing game!!!

I HATE the grudge matches. It seems no matter how many powerups I hit dudes with they never fall behind. Rubber banding FTL. 

I don't know. So far, the game is O.K. but also very frustrating. It seems like you are bombarded at every turn and the AI is ruthless. This is nothing like Mario Kart or Sega All-Stars.  All I can say is that I'm glad I rented it for now. Maybe I will buy it when it goes on sale. I think this clearly a better multi-player game.  
 
EDIT: Man, I can't win the last Mayhem race. 2nd is the best I can do and it's not good enough.