I filed a bug report last week and another yesterday on this, but others have also mentioned problems with it as well:
Create a box on the ground..
Hit Ctrl and grab the Y-axis...rotate...
Watch the X and Z axis change to 180,180 (and sometimes 360 instead of 0?)...
Now, create another prim...link them....
Rotate the Z axis....
Watch the X and Y axis change by +/- .05 almost randomly up and down
This also ocassionaly causes the client to crash hard.
I've sent in all crash reports, and filed 2 bug reports, mentioning it to Live Help member last night. But it's very difficult to build if I can't rotate stuff without worrying about it flipping my stuff by itself !!! or crashing.
It would be nice if we could get status on submitted bug reports? Perhaps by report#?