It got patched 5 times, it's better (I've finished my run of GTA III and now I am in the middle of Vice City).
The great thing about patches is that now you can see all other problems in the game:
- the cars are exploding way too fast (if your car flips on its roof, it will explode in exactly 4 seconds, which isn't enough to get out of the car and run)
- the police is way more aggressive than ever
- the gunfights are broken (you can get killed after only 5 seconds of a gunfight)
The fast car explosion thing made me quit the game and uninstall. Its completely broken and frustrating to play, especially during missions. Where you don't have time to even get out of a burning car before it explodes.