As relatively new to Edinburgh I am constantly amazed by the terrible condition of the streets in general. I travel from Leith over to Cramond and back on a daily basis and it's like a slalom course as you try to avoid one pothole after another. In places - and for quite long stretches - you just have to bump along wondering if the car's suspension/tyres are going to take it. I agree about the tramworks too, by the way!
The pavements are as bad as the roads - I have emailed Clarence three times about the holes in the asphalt, the first time was a year ago, but nothing has yet been done. A friend once commented that Edinburgh had third world road surfaces.