I documented this bug on 4/17 and promptly forgot to report it, so I do not know whether it has been fixed between then and now. The screenshots are worth a thousand words, but, in a nutshell, the rockets fired by rocket puppies in tier 1 skipped up and down as they crossed a hole in the level. The rockets would also become invisible while above the edge of the terrain.

I am playing on a MacBook Pro running OS X 10.6.7; I have no idea whether my video drivers are up to date, as I don't know of any way to manually update them on a Mac. My graphics card is an NVIDIA GeForce GT 330M, and my Intel Core i5 apparently has a built-in "Intel HG Graphics" GPU with 288 MB of VRAM. I play Spiral Knights in windowed mode with a resolution of 1024x768x32 0Hz and the graphics quality set to low, vertical sync enabled, and other advanced options disabled. I am happy to provide whatever other relevant details are needed to diagnose this bug.

Screenshots: http://img204.imageshack.us/img204/8928/rocketbug.jpg