i recently played Forza 2 and down shifting actually slowed the car down and shifted a bunch of the weight forward, i don't have a ps3 so i was wondering if the demo for gt5 had this characteristic as well?
Trail braking does work, and MR cars do get tail happy under brake, so yes. In fact, get a stock Integra type r, and put super soft racing tires. I remember I did a complete 180 the first time I tried braking into a turn.
So yes, there is weight transfer.
As for engine braking, in the formula 1 cars, the wheels lock up in first gear if you let off the gas, so yes, there is engine braking too.
um, ya, it's called engine braking... works in real life, works in every GT game since GT1.
When you downshift, the angular velocity (revs) of the engine's rotating components pick up due to laws of gearing and such. A greater number of revs means more compressions strokes (and more friction, but its role is relatively minor), which means more energy dissipation and thus, deceleration.