Sry for resurrecting a dead thread...
@Wrob3l - I've seen it too well in PS3 Era
HW was quirky but nice as long as you knew how to handle it, but dev support... NC. Let's just say that in most of the cases the support was much, much better on M$ side - really
Also I don't think that MS hate is justified here. Like it or not, but designing/writing an OS with this kind of compatibility and backward compatibility req's is a rather huge and complex task. So far they manage to get it done quite okay (technically, aside from design choices)
Lets get back to the subject however
As for the damages... I think that it would be cool to blow somebody up once in a while. The respawn is another question. Personally I think it is unnecessary, and all of the destroyed cars should remain out of the race, no matter if AI or player controlled. On the other hand, the player should be given the option to absorb the pickups to regain part of the energy (repair the car?)
That's just my opinion