I haven't run into any bugs myself as I play through Half-Life 2 again. But then again, it's after Valve had pushed out an update earlier today (June 4th). Perhaps that update had fixed some bugs already.
Overall, the visual is a noticeable improvement, particularly lighting-related effects. The reflective surface is perhaps the most obvious improvement (cubemap effect enhanced), but when weapons fire (I noticed it in automatic turrets), the flashback offers dynamic lighting. In addition, when you turn on the flashlight, the shadow casted by the bright flashlight is dynamic (it moves with the movement of the flashlight direction). This is most easily noticed when you shine the flashlight through a prop metal gate or fence in a dark spot.
I like it.