I have just discovered a simulation bug in version 4.12.462. I don't know if it is in older versions as well, but I would think so.
I am simulating a Mega88, and am trying to manually clear the Timer2 overflow flag (not letting an interrupt do it by itself). This I do by setting the overflow flag to 1 with sbi, like this:
sbi TIFR2, TOV2
However, the simulator clears all three flags in TIFR2. I think this is the expected behaviour of older AVR's, but as far as I can read in the datasheet, this does not apply in the Mega48/88/168 case.