Litterz: In Petz 5, petz can have up to four offspring in a litter. I'm not sure why, but most of the time, the pups/kittens within the same litter usually have similar looks/features.
Fuzz: The fuzz on addballz is often changed (more or less fuzzy) in offspring. This doesn't happen consistantly, though. No fix is really known.
Outlines: In 2nd generations and beyond, most outlines change to black (including dog nose color). The exception to this rule is the irises (which are outlines to the pupils). Eyes are very different features than the rest of the body, and they inherit and behave differently.
Poodles: In the game's adoption center, poodles can have a variety of fur styles, but all 2nd generation and further have the "puppy cut" (fur all over the body except for the face).
Whiskers: I'm not sure how whiskers inherit. It is not along with the head and face... It's not with the ears either.
Floating Stripes: Tabby tail stripes are made of addballz, so when bred to a tailless breed, the stripes sometimes end up floating with no tail to hold them!