I upgraded to the new Waterfront - man, this is beautiful, though FPS has taken another hit down, (and I am on a high-end machine GTX 480, Core i7, SSD etc.). Is it possible to create a transition door at the entry points to the slums in the back of the waterfront to reduce the load. Waterfront is a game killer at the mo!:(
I noticed some issues:
http://bildr.no/view/747890
http://bildr.no/view/747891 constantly appearing and disappearing when trying to enter the door. http://bildr.no/view/747892 (almost disappeared, but would reappear in a second. This door is the door to go above the waterfront structure, on the left of the Bloated Float.
Are the pathgrids OK? I checked, looked fine, but http://bildr.no/view/747893 to reach the Marie Elena from where the Elven ship is docked!
Damn, I forgot about B&M's boats in the Waterfront. Somehow, this will be resolved for our next release.
No clue why a guard would do that, unless one has the wrong AI package. Those on the walls have AI that keeps them permanently on the walls, those on the ground have AI that keeps them permanently on the ground. Will be investigated (see my response to Stormgarde too).
All pathgrids are fine, but Oblivion NPCs often do stupid things.
As for moving the Waterfront into a child worldspace, this would be impossible without either placing walls all around the Waterfront lower class area, or being totally unrealistic and placing an invisible wall instead to keep the player out, and having no NPCs or clutter or plants or anything within that invisible-walled area.
why are the files so BIG? 150 MB for it all atleast. is there not some sorta low fat version? i have limited gigs (8 GB p.month) to share with 3 over people, so it's sorta hard for me to get this fantastic mod.
this looks great guys! keep going

Don't download the resources. And don't complain about the big yellow symbols all over the place. The files are so big because this is a big mod, what other answer can there be?
I also noticed that High Elf ship was embedded in Captain Ansol's ship.
The guard issue sounds similar to something I recently noted in another mod. What I was http://www.gamesas.com/index.php?/topic/1121501-elsweyr-dune-gate was that NPCs had problems using doors between the same world space as well as with crossing subspaces.
Even with a Radeon 5970 and 2 Gbytes of VRAM performance is definitely borderline in the expanded waterfront. Streamline is definitely working overtime there. I had everything so perfectly tweaked for the prior version, too. :brokencomputer:
The purpose of subspaces is to allow NPCs to use doors linking to other doors in the same interior cell/same worldspace. There is a subspace for the top of the wall, and the vanilla game places a subspace too across the entire Waterfront. I lowered the vanilla subspace so that it didn't overlap with the new one, but in our next release I'll disable the vanilla subspace and replace it with a new one, as subspaces are persistent objects, so if you've already visited the Waterfront before installing this new BC release, you'll still have that subspace in the old position, which may be the cause of of the problem if the two subspaces are awkwardly overlapping.