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Im writing this while talking and discussing the subject with Chilli, so I think he can give a more in depth explanation about the turning and why there is more understeer at higher fps.
Vsync getting turned off and all graphics settings getting put down to minimum for MCEC.
#PCsucks
Before coming to the conclusion that a higher framerate is better by default we need to dig a little deeper. For the sake of keeping it simple I wont go into the fancy bits of car mechanics, so I'll only talk about traction.
So continuing what OhDarn said we'll take that 30fps = 1 unit/frame measurement even further. But instead of saying we're turning the car, lets talk traction and look at what happens at a per-wheel level.
The wheel will check if its travel direction varies from the direction it's pointing and react accordingly. So lets start with initiating a turn:
Step 1, no turning so no force is applied.
Step 2, we see a angle difference. A force is applied proportional to this angle difference. The car ends up turning.
Imagine the first step being at 30fps, so we'll be turning 1 degree. Frame 1, no turning. Frame 2 the wheel sees the difference and applies a force. At 60fps we'll get one more iteration in there. So Frame 1, no turning. Frame 2 we have 0.5deg of turning. Frame 3 we'll see less than 0.5deg of turning because it got partially corrected during the last frame. What we can extrapolate out of this is that at a higher framerate it will approach a sort of "equilibrium", a stable state, earlier. Most cars end up understeering at their stable state.
So what happens is that the rear wheels will see the angle difference way earlier at a higher framerate and start applying a correcting force earlier as a result. Assuming that we'll keep turning at the same amount, the front wheels will always have to keep fighting to turn while the rear wheels are working moderately hard at keeping the car straight.
So imagine the angle limits of a tyre being at 5 degrees. But knowing the insane amounts of traction the cars have it might find itself at 6 degrees the next frame. The wheel freaks out because it realizes that it has broken traction and it will run a higher risk of oversteering. The front wheels will also be turning, so at this point it might provoke even more oversteer for all we know. But knowing that a higher framerate will give the wheels more time to react, the rear wheels will help with straightening out earlier, so at the same point in time it might be a 4.9 degrees instead of 6, so it safely sits within the limits. Ok so the rear wheels are in control but what about the front? Well they're still fighting to turn the car, possibly sliding a little bit, so we end up with understeer.
As a side note the reason the cars dont phase through thin walls and objects at high speeds is because the collision detection side of the physics will check if there will be anything between the current and expected position. If there is anything in the way that will be taken into account. But because this makes the calculation for the object more expensive it's usually not used for all physical bodies in the scene.
So what framerate is the best?
In reality, neither. Why? Because if the physics are written in a way that makes sense it will keep taking the time difference into account, known as the time delta. Because of the way floating point numbers work in computers we'll never ever be able to replicate the same thing twice unless the framerate is
always the same without any form of change in each time step. The computer tells us "your value is 0.1" when in reality it is more likely to be 0.0999999... and these imperfections will accumulate the longer the scenario is played out. This is why having a unstable framerate can either give you superpowers or put you at a disatvantage. Hey, welcome to one of our favorite uncontrolled environments known as video games known as the land of assuming things to get through the day.
From a practical standpoint a stable framerate that feels smooth is the absolute best because it's predictable and feels natural. It's for reasons like this CoD aims for 60fps on consoles. It's for reasons like this some of us decide to go for PC to get a higher framerate and not only graphics. Like it or not, a higher framerate is usually better. The reason I say "usually" is because if it's unstable it will be more painful to play than a stable low framerate. Hm... 30fps and below = cinematic anyone? Nah, games need a decent and stable framerate to play well.
If you think everything that has been discussed up to this point sounds really stupid, no matter how true it may be, it's the reality of how games work. So you better suck it up or you're in for a bad time.