I sometimes see avis turn bald, and then not-bald, in quick succession. I seem to see this most often when doing a couples animation, like a salsa or a massage. Also, last night I was hanging out at a friend's house, and a rug kept flashing in and out of view, sometimes revealing the underlying wood, sometimes not. Repositioning the camera can ameliorate the issue, but not remove it altogether. It's especially annoying when dancing.
I'm using the default viewer (I think). Vista 64, ATI 8800 Ultra 768Mb, 4G RAM, plenty of hard disk space. I used to have crash trouble, but decreasing my texture-memory size slider seems to have cured most (not all) of that. In fact, I regularly run two instances of SL without much crash trouble.
I thought I saw a thread on this here a few months ago, but I just did a quick search on "bald" and couldn't find it. Apologies if it's been asked answered.