Been playing with WMP11 on XP for a while and now onto Vista RTM:

1) No support for multiple audio streams in an AVI, it just plays them all
at once
2) No VOB support, have to rename as mpg and hope for the best
3) Can't define your own file extensions for the library, .flac, .ogg, etc.
(Luckily there's WMPTSE and it works on Vista)
4) No support for hardware DD 5.1 decoding (e.g. Creative X-Fi). Still need
to use something like AC3Filter.
5) No Aspect Ratio adjustment
6) Timeline slider bar is too narrow
7) No support for RIFF tags in AVI files. Tagging has been missing from
video for far too long (wmv excluded) and this would have been a good
opportunity to get some support going for it.
8) Codec support is also poor. FLAC being unsupported out of the box is one
thing, pretending it doesn't exist and just saying it can't play the file is
abysmal. Surely it wouldn't have been that difficult to provide a link to a
page with some suggestions on what to do about any codecs that Microsoft
can't supply? Yes, I know there's Google, but that's not really the point.
9) Still doesn't appear to be any form of codec manager. Codecs are absolute
hell, even if you've got some idea what your doing. Just something that
allows you to say (for example) XVID and DIVX FourCC files should use
c:\xvid\xvid.ax

There are other things, but these are my biggies.

It really does seem as though all the effort has gone into DRM and making
the interface as unintuitive as possible rather than actually adding new,
useful features. Winamp still beats WMP into a cocked hat for functionality.
I really, really want to use WMP as I vastly prefer the all in one interface
rather than Winamp's multiple windows, but the functionality simply isn't
there. VLC also has much better features and will play almost anything
(terrible interface and no media library though).

I know it's a Microsoft product and it's geared towards Windows Media and
keeping the RIAA and MPAA happy, but would it have been that difficult to
spend some time on features rather just interfaces to online music stores?
Not that I ever buy music online and never will until they are at least FLAC
quality and with no DRM (I know, I know, it's never going to happen...)