Cheating or unfair AI, regardless of a games difficulty is very frustrating. It's one of the reasons I completely went off the Need for Speed games. The AI/game cheats so badly that it ruined the game. I don't remember which title it was from "the franchise", but it was before Undercover. You can never lap an AI opponent, their cars will always match yours for performance, if they crash head-on into a wall, they will be back up behind you within seconds.
No matter how flawlessly the player drives and how many accidents the AI have behind (or as a result of) him, they will hound him till the en. Meanwhile if the player so much as scrapes his wing mirror, slowing his car down by 2/10ths of a second, he'll be overtaken at the line by a virtual racer he thought lost in his dust.
Mario Kart on the Wii also drove me mad. It's not so much "cheating AI" as it is the game's design choices. I enjoyed the gameplay and levels well enough, but whether the player wins or loses has absolutely nothing to do with how well they drive. It's wholly dependant on the game and the player can drive as flawlessly and cleanly as they like and they'll still get lightninged, shelled, overtaken, shrunk, squashed, knocked off edges and more through no fault of their own and without any control over or ability to influence the outcome. That annoys me greatly, didn't bother finishing that one either. It constantly punishes whomever is in 1st to the point of frustration and resentment.
