One major problem is Emacs's poor performance when lines get really long (e.g. 1 MB). That's rarely a problem when using Emacs as a text editor, but it can happen quite a lot when running shells.

I've managed to avoid this by setting my shell to a script which pipes bash through GNU fold, so long lines are broken up before Emacs ever sees them (around 1000 characters; slightly earlier if there's whitespace). Rather extreme, but I really like shell-mode (not really a fan of eshell)