I've found after watching the AI drive that the trick to rallying is to take the corners in a squarish,
brake-turn-squirt-brake-turn-drive away
method, slowing down enough to get traction for the turn, and trying to get as fast as possible in the straight line between turns. This is opposed to the street driving method of
brake-turn-apex-squirt.
I think it's so difficult for most people because the majority of GT4 races depend on the road method for success (and also allow for loss of traction without severe consequences), whereas if you do that on a dirt road, the last squirt sends you into the wall.
Once you get good at it, you can also slap on turbo packs without suffering from loss of traction, as it won't be an issue anymore. I was able to win a 74 pt ia race with a stock peugot 206 rally car, and a 114 pt after giving it a stage 3 (on Tahiti) using that method.
Changing the VCD(?) to around 35, and shortening the gears a few notches also helps.