The address bar functionality truly drives me nuts. It functions poorly, often giving bad returns, limited answers, and even when directly expanded only gives a small (and for me, yes, twenty is a small) subset of options to browse. Further, the way the address bar chooses to display its options - page title, followed by address, puts the information I find to be important when actually trying to use it to the side. I don't browse by page titles, I browse by addresses and memorization. I know that this functionality is supposed to be more aestetically pleasing, but I don't care much for how nice a thing looks if it cannot be modified to provide me the options and wealth of information I would nominally use.
Or, in simpler terms, I am very much not a fan of the 'smart address bar', since it is almost by the numbers everything I do not want in a primary browsing feature. The nominal fix - turning on just address bar and browsing history - doesn't fix the underlying problems I have with it. I realize I am griping, but it is the singularly most frustrating issue I have with Windows 7, because under this OS I haven't the option to not deal with any Internet Explorer but 8. (Well, IE6, if you bejigger a lot, but it is as large a step back that I might as well just go third party)
In a lesser issue, I also find that, while tab groups are useful, IE8 doesn't tree as good as IE7 - that is, if I open two tabs (B and C) from a root tab (A), then one from B (D), then one from C (E), then B (F), then C (G), in IE8 the tabs would be ABCDEFG, while in IE7, if I remember the functions correctly, they would be arranged ABDFCEG. IE8 doesn't recognise naturally produced subsets within a tab group, just shunting every new tab to the end of the group. Or at least so much as I have found. This isn't really as large a concern as the prior - one affects how I use the internet the vast majority of times I move between, and even within, websites while the other is a desire for cleaner organization of pages opened - but it limits how well I deal with the system.
Anyhow, that's a quick thumbnail of why I find this particular browser to be highly frustrating.