I noticed I forgot to put the wheel on simulation mode steering ... doh. Feels even better now.
In general, in terms of physics change, the suspension and grip do seem to be improved a lot. Especially gliding sideways out of the corner, which is something that happened to me on the Nurburgring in real life, is now also happening in the game much more realistically. Feels much better.
I've been driving the X-bow some more on Bathurst, great race, and at higher difficulty, the AI does a good job of challenging you. Have to be quite careful not to lose the car. I just nicely drove to first position round about the final downhill straight, only to take the hill at the end a little careless and losing it, coming in third. Doh.