There are a number of technical constraints to SL that drive me nuts. I'm not talking about lag here (although that does indeed drive me nuts- but there are very good reasons for lag to exist, unfortunately). My current largest headaches:
The avatar mesh...gah. I wish they'd thought things through a bit more when they decided to use these things. The head is the most problematic, as things are jammed together too close together. The inner mouth is shoved right up against the back of the head, so either you get head seam or flesh tongue. The eyelashes are up against the scalp, giving a black edge when you've zoomed out enough that it downsamples (also see head seam). Only one arm for the torso puts some severe limitations on what's allowed in shirts/jackets/tattoos. And only one foot...why? You've got ample space for two. I know, you've already got one arm, you might as well have a more efficient foot mapping, and that is even more likely to be symmetric than the arms, but still, limits what you can do severely. There's no fixing that at this point, without just scrapping it for an entirely new UV map, which will just piss everyone off- people with custom skins will find their skins useless, and skin makers will just have people bitching to them for free upgrades. At that point they might as well just go with an entirely new mesh anyway, since while this one does work reasonably well, it's older tech- plus the mesh was associated sort of messily, when you look at how things deform badly at not-even-out-of-the-ordinary sizes (look at skinny people's shoulderblades, my nose and cheekbones could cut glass, my knees are ridiculously nobby, and the entire neck shoulder area on the male model just makes me cringe. I don't actually care that large breasts become boxy though, I admit- it certainly doesn't seem to stop people). Some of that is a limitation in making it stretch so large to small, but it still could be done better.
Worse, whoever figured out the alpha for clothing items...*sigh* Have you noticed that bastard seam that will show skin through around the middle unless you've got something in the jacket layer covering it up? Because that's entirely because the alpha was halfassed. Aside from the fact the lines don't match up in the least anywhere (and no, there really isn't any reason for as much of that as there is other than "I couldn't be arsed to care"), you can put all your sliders to maximum coverage, and still skin shows through because of messy alpha edges. That could be fixed, now, with minimal pain to the system. But they aren't going to do it, but it's a "minor detail issue" and see previous "can't be arsed to care."
And the skirt mesh...ugh. That's just a massive headache.
There are also many suggestions that while possibly a good idea have negative ramifications. I'd love to see more layers, so you could have skin tone, makeup and tattoos all in a "skin" layer, both for the problematic head area and so you aren't using up slots on the body, but remember lag? Yeah, that just adds to it. Every extra layer is just a little bit harder you're making the system work, and the system already has issues with how hard it is working. More attachment points fall into the same "it would be nice but just going to cause problems" as well.
Animations could do with a bit of an overhaul. Placing more control over them in LSL (or Mono) would be ideal really. The hand position glitch has been a problem for a while and no one cares, so it isn't going to be fixed. Only 6 votes? That's rather disappointing. Really, I'd far prefer to be able to dictate hand position in the programming language anyway though, I can already fix the expression glitch (since it also blips and goes away, if it even starts at all). It appears as if it's an uploading glitch as well, not a reading glitch, which means everything that people upload now? Broken. Will need to be uploaded again if they ever actually bother to do anything about it. That really pisses me off. You're talking hundreds of wasted files.
I'd also like to see in general more animation control- in world control over priority would be awesome (instead of having to upload the same pose 4 times, upload one and assign them in world). The ability to adjust centre point would also be a boon- consider all of the custom sits which fail horribly if you don't have the perfect height avatar, the ability to add a modifier to the hip location would make things far more feasible. In general, the animation system gives you only just barely what you need, and not what you want, which really isn't helpful.