http://img227.imageshack.us/img227/2402/deadcity.png
This may be more a feature request than a bug, but the game allowed me to build a city, which was then impossible to construct buildings for. Some kind of glowing city-radius or outline might appear when you hover the cursor above the Build City icon. As it is, I can see a lot of un-win-able situations coming up because players have built cities in bad spots. It didn't look like a bad place to start a city.