Ok here are my observations from an hour or so of tinkering last night.
Brace yourself it's going to be a long one
Now I didn't do super scientific testing, I just did a whole lot of hot laps and looked at the handling of the car from a racers point of view.
Controller - Dual Shock 2
Track - Grand Valley East section
Car - M Coupe
I have all stability control & TC off always
Shocks for all setups - F/R - 7-8/8-7 ( bound and rebound)
First with R1 tyres-
My race setup (well the parts that matter to this discussion)
Springs - F/R - 9.5/9.0
I did half a dozen laps with this setup for a start to get settled in
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Changed set up
Springs - 9.5/8.5 (softer rear)
Now with the slightly softer rear tyres I was immediately slower, I could not carry as much speed into the corner I had to slow it down more or use more lock (which automatically scrubs speed) to get it to turn in the same and could not get on the power as early as before ie. it had less corner exit steering
Conclusion - the car had less steering everywhere, which means the rear had more grip, which was predictable
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Changed setup
Springs - 9.5/9.5 (rear springs harder than original setup)
I went faster than my original time 2nd lap! I could carry speed way deeper into a corner than my original setup and get on the gas earlier, the car just rotated better in the corners.
Conclusion - the car had more steering everywhere, which means the rear had less grip, again predictable
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Changed setup
Springs - 9.5/15 (full hard in rear)
Was slower again, the car had a lot more corner exit steering, I could light the rear tyres up relatively easily, but surprisingly it developed some understeer on corner
entry in the mid to highspeed corners.
Overall the car seemed very unbalanced and would switch from oversteer to understeer seemingly at will
Conclusion - car had less rear grip everywhere except for where I highlighted, it seemed like the settings were so out of whack that the physics engine got confused.
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Changed setup
Springs - 9.5/12.5 (rears inbetween full hard and my normal setting)
Was still slower, now this setup behaved more like I thought it would, not much rear traction on corner exit which meant that I had to go easy on the gas coming out of corners, on corner entry the rear was a little bit more skittish than my normal setup but not dramatically so, the only exception was on the very highest speed corner it still under steered a tad.
Conclusion - car had less rear grip, but the car felt more balanced and consistant than the full hard rear spring setup, it didn't switch from over to understeer at will
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Changed setup
Springs - 9.5/4 (fullsoft rear)
Was still slower, now the car had
heaps of turn-in off power steering, infact violently so but as soon as I touched the brakes and slowed down into the middle of the corner it switched to massive understeer also with massive understeer on corner exit.
Now I could get the car into a nice drift if I was violent with the steering and brake/throttle so as to keep the rear of the car unstuck from the initial violent oversteer, but if I let the rear settle down the understeer reared it's head again.
Conclusion - car had way more corner exit rear grip, but less high and midspeed rear grip - same sort of comment as the full hard rear spring setup but reversed, again I'm not sure how to explain the oversteer, but it seems to correlate wit hmy real-world findings
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Changed setup
Springs - 9.5/7.5 (rear in between full soft and my normal setup)
Was still slower, the car had a little less corner exit rear grip than the full soft settings and but still had the oversteer in the highspeed corner throttle liftoff case
Conclusion - see my middle stiffness rear spring conclusion but just reverse it
Now with N3 tyres
The same observations apply as for the above cases although I was 5 sec a lap slower and the differnces in handling where increased with the less grip available, I was however more easily able to control the attitude of the car with the throttle, being able to make it wheelspin almost at will in any corner.
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At the end I went back to my new slightly altered race setup (changed the back springs to 9.5 from 9.0) and went almost 1sec quicker than I had 3/4 of an hr ago with the same setup.
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So the conclusion that I take from all of that is that possibly the physics engine in GT4 is
very lifelike, it is alot more consistant to the engine in GPL which I play a lot and is widely recognised as a very good sim, the problem that I think we may be seeing is that because it is so real not many people would have run a real car with such hugely different spring rates and so they would not know that it is not a strictly linear thing, if you go to soft the you will get some oversteer, and so setup changes made in GT3-2-1 may not apply for the full adjustment range
This is just my opinion from what I have observed myself