So braking things down here is where the projects stands now:
-The art and design is complete, all the tracks, frontend menus and items are in game.
-The audio is about 80% done, everything is in game and working but in need of some polish.
-The AI as mentioned above has given us a lot of problems, we decided to scrap the work done so far and start from scratch with a new programmer.
-Physics and car handling has been the most challenging part and we will continue to tweak and refine it until the game's release.
Considering how things have turned out for us it would be unwise to give another release date, but we will as soon as we are confident.