I have been working on a Elgg site for the past month or so, its code Is horrible, however its not the worst i've seen :D. it's not built for programmers like drupal is :D. but its not to bad, once i got a handle on the metadata functions and read most of the code i was able to navigate it well and create custom modules and such.
what would help immensely would be some real documentation and explanation of the elgg system. i dont think thats going to happen though :).
out of the box there are a few problems, there are some bugs that havent been fixed for a while and i've had to go in and fix them myself. overall you can make it pretty and it has some cool functions, but i wouldn't dive in until i had read the main core code to get a handle on whats happening on the backend.
oh and massive use of storing values in globals. and a crap ton of db calls (same with drupal though).
i wonder if the use of storing everything, and i mean everything for your site in the globals will really hinder the server if you have a massive user load.