Whilst I don't have anything like the training or simulation experience of some of the very erudite posters on this thread, I have just finished a type rating on a completely new type and size of aircraft (a smallish bizjet) in UK CAA approved Level D sim, followed by flying the aircraft itself and have some observations on sim fidelity.
The simulator was very bad at simulating the aircraft behaviour below about 100ft. The ground handling was very over-sensitive, with PIO being very easy to induce on the takeoff or landing rolls. The landing behaviour, especially in crosswinds, bore little resemblance to the real aircraft (which is the easiest to land I've yet flown). This was mainly down to the modelling of the control loading. The aircraft in question uses direct cable controls - I imagine it's harder to model actual aerodynamic loads than the various artificial feel systems in aircraft with hydraulically assisted flight controls?
Separately, I have read a few articles in Flight of late about Lm2 lateral acceleration modelling which seems to make handling exercises seem significantly more realistic - can anyone tell me what it is and how it works?