I'm not sure if this has been discussed before, but I've found some graphical glitches in Yoshi's Story with the Daedalus Direct3D8 Rel. 2 graphics plugin. First of all, it's absolutely fantastic that people are working on it to get games like Yoshi's Story work, I really appreciate it. But now the bug..
The textures in Yoshi's Story aren't aligned well; you have to wait, say 4 seconds, and then the textures are placed in their right position. This doesn't let you play the game well. I made a small gif animation of the situation. First, the textures are misplaced, and in frame 10 they jump back to their proper positions. As soon as you move left/right and the scenery moves out of the screen, it's going back to another weird position. Maybe this would help you Rice? But you probably know of this problem, or am I the only one who has it?
Oh, and one small glitch; Yoshi's shadow is white instead of black. Keep on developing the Daedalus plugin though, it's gonna be great!