I have definitely noticed problems with it finding the best route. But, there's nothing out there better in the in-dash navi units.
How bad is the navigation software in the Z1????
Well, I have had the in-dash nav for an '05 Nissan Altima and an '06 Ford Explorer, and a Garmin StreetPilot 7200 and now the Avic Z1. The "best" navigation for me was the Garmin StreetPilot but it is not in-dash.
There are more POI's in the Z1 than in either the Ford or Nissan products.
There is no Lat/Long input for any unit I've had except the Garmin.
All-in-all, the Z1 is a respectable unit but it does lack a bit of "fine grain" control and accuracy. It will generally get you from point a to b safely. But, as others have said already, the map software is out-dated by as much as two years or more. (We have had one way roads changed to two way and vice versa about 2.5 years ago and they are incorrect on the Z1).
The Z1 can do it, IF it is given accurate software...