In GT5 it improved every car, by a lot. I distinctly remember struggling with a front wheel drive Ford Focus(if memory serves) on a city circuit seasonal. When I finished I decided to try with skid recovery on, instant 2.5 second advantage. Cures understeer the same way it would oversteer and it micromanages traction so closely that its advantage really is on almost every turn, not just when things are obviously out of shape.
I understand the reasoning, people that have every nanny option on would howl and moan all day, doesn't matter if the prize car is given away with the bronze trophy or whatever. Polyphony are very sensitive to that, it's why GT5 finally changed seasonal events(not all) to the same set up as license tests, no option to disable it. It's one of those "be careful what you ask for" deals, we wish they listened to the criticism and then they knee jerk to the casual... Having the option, that's a step in the right direction anyway. Next step is treating the time trials like the Academy stuff.