First off.. Modstep is amazing and I'm it's biggest advocate. It's the one iOS app that I couldn't live without. It's more vital than Audiobus to me (but please don't make me put that to the test.. 
).
Ok, anyway..
With it's amazing ambition, it does however have a lot of 'teething problems'. Fortunately it is stable live when used in a purely MIDI function (or with it's own sound sources) controlling devices hosted in AUM. To be as clear as possible, this thread is not about bashing Modstep, it is about:
Pooling communal knowledge of how we work around Modstep's issues.
Raising awareness of these issues in the hope that they will not exist in the future.
Let's get to it. Here are the two big ones for me:
1. MIDI notes not being played
This one is the show-stopper for me. I've tried everything possible to get even 8th notes to sound from Viking (hosted in AUM) and it seems simply impossible. I've also had this problem with Sidtracker64 and Thumbjam.
I've got no solution to this aside from endlessly tweaking notes ends and beginnings to see if it helps, or simply discarding sections that don't play nice in favour of other compositional choices. If anyone has advice or any work around I'd greatly appreciate hearing about it.
2. Modstep's audio ports disconnecting from AUM
Modstep is insistant on delivering sound from it's internal sources through it's own output directly to the device's stereo out rather than into it's Audiobus destination. It constantly refuses to deliver to AUM from inside AB. Makes saving and recalling presets between Audiobus/AUM very impractical. Possible to work around when only using a single Modstep instrument, but unbelievably annoying and time wasting. Also means that it's impossible to use more than one audio source from Modstep art a time which is a shame. I love Modstep's Sampler but have had to drop it from my workflow because while it's possible to get the synth delivering audio to AUM with a couple of complete restarts of all connected apps, getting both of them working at the same time seems like a lost cause.
The only way that I've found to get around it is to keep rebooting all apps until it connects properly. I boot up Audiobus first, then boot empty template in AUM (I save the state after clearing AUM) then Modstep. If it doesn't work at first then sometimes I delete and re-open Modstep in Audiobus and/or remove then re-add it as a source in AUM. Eventually it works.
@wim said:
3. Recover from IAA or AU app crash
I generally don't host apps in ModStep, but from time to time have tried it either for quicker workflow or just to see how it's now doing. However, it's possible to get into a loop where ModStep will crash on startup due to problems loading a hosted app, and there's no easy way to break out of the loop. To avoid having to do a re-install of ModStep, and losing anything you can't restore from a backup (including not just projects, but templates and imported files), there are two solutions that have worked for me:
Uninstall the IAA or AU app that is crashing, delete the project, then re-install the app. Typically I won't have a lot saved in these plugins, so it can be easier than recovering ModStep. An example would be an FX plugin that you don't have a lot of presets saved in.
Start ModStep and then as quick as you can delete all the auto backups and the project file itself, then kill ModStep before it crashes. You have to be very quick at this, and may need to try more than once. Sometimes you get lucky and startup will say the file is corrupt, taking you to an empty project.
Yes, there is a setting to not "Autostart IAA apps", but currently it doesn't do anything. I've reported it to the developer and hope for a fix in the next release. Once fixed, a third option would be to try to turn off that setting before the crash happens.
AU's can cause a similar issue. One project had several instances of RuisMaker. It started at least 50 times without issue, and then decided to hang about 2/3 of the way through loading of the instances. Only uninstalling RuisMaker worked to recover that time as I couldn't get to the file screen to try option 2. Unless they add a (working) option to not Autostart AU apps, I don't see a way around that.
Personally, even if it were completely stable, I would host all my apps outside of ModStep anyway for many reasons. There is nothing about the internal sampler or synth that I've found I can't get as well or better from other apps. So the audio output issues aren't that important to me. I almost always load ModStep in AudioBus or AUM for ease of app switching and state-saving, but I always mute the output.
4. Transpose broken when scale activated
When using transpose while a custom scale is selected, the notes become nonsense. This cannot be reversed.
The solution is to always remember to set the scale to chromatic.
5. Clips displaced from the 'Linked' beat
Tempo changes on scenes generally work very reliably for me, however occasionally on the tempo change Modstep's clips will pull one 8th note ahead of Ableton Link (so other apps running in sync will will be one 8th note behind.
Re-starting any Modstep scene (including the same one) will bring it back into sync, but obviously that's not ideal for a live performance.
6. Lacking grid for 9/8 (and other varients time signatures)
Not really a bug, just a limitation. Mostep is lacking reference grids for some 'somewhat' common time signatures.
Modstep's 'time signature' functionality is pretty good in it's simplicity. You just use whatever grid you want to give you some reference points and so the time signature is basically 'universal'. Using Patterning in 'Divide' mode allows you to sync to it in any time signature. To get around Modstep's limitation you just have to put the notes into the right place manually or learn how to use other grids to give you the correct reference (for example one quaver in 9/8 is 5.33 lines with a 1/48 grid).
If anyone else has anything else to bring forward, I'll try to keep this post updated as best as possible with your contributions. Hopefully it can be useful info for users of this (amazing) app.
Cheers,
Oscar