The recent amendment to FAR 25.1329 (Amdt. 25-119, Eff. 5/11/06) doesn't allow autopilots that can lead the airplane into dangerous situations. For example, the A/P can't have the authority to stall the airplane. This is the good news.
The bad news is that there is no requirement for retrofit into old airplanes.
The other bad news. The Advisory Circular that was issued simultaneously with the FAR amendment says that disconnecting the A/P as you reach stall is OK.
What the rule giveth, the advisory circular taketh away.
Goldfish85