Rattling inside right muffler (replaced with Flowmasters).
Burned up rear posi-trac (only one tire burns rubber now).
U-Joints needed replacement.
Speedometer cable was melted through.
Speedometer drive gear was also replaced, but still didn't fix the speedometer.
Replaced the convertible top cylinder.
Both of the outside door handles have broken and not many people can figure out how to use them (good anti-theft device).
Rear window shattered randomly.
Air pump locked up (I over-revved and it broke).
Fan clutch broke (replaced with electric fan).
Clutch & Flywheel replaced. It still slips on occasion and makes crazy noises.
Ashtray won't stay down (I hear that this is quite common in the '87-'93 Mustangs).
Fuel injector got crushed and was preventing the #3 cylinder from firing.
Headlight switch needed replacement.
Turn signal stalk needed replacement (twice).
Right rear window will not go down.
Innumerable minor faults/failures in the cabin.
Lots of squeaks and creaks due to a chassis that bends like a wet noodle.
The rubber loses tread at ungodly speeds, though it is probably driver-induced.
Even with all of these faults, most of which occurred within a year of purchasing the car, I have fallen in love with the sheer beauty and brute force of the car.
As long as it is kept out of the rain, the Mustang has wonderful road manners. The suspension is comfortable, yet the cornering ability even surpasses most of today's luxury cars (with the right tires).
The Mustang, even in stock form, is able to hold its own in most races. If this is not satisfying enough for you, effective modifications are simple and relatively cheap.
It is a great car to learn to work on. Simple, straightforward American engineering may have its weak points, but gives great opportunity for learning about working on a car.
If you are considering purchasing a Mustang for your child, I would testify that it is a great choice if you trust them. If you think they will abuse their privileges of having a powerful car, perhaps a newer V6 Mustang would be a better choice (though its reliability is questionable).