I just used the "Wait" function while standing in Whiterun, and when the wait was up, I spotted something (I couldn't quite make it out) in the sky just down the path from me (in front of Breezehome). A split second later, I saw it drop to the ground. I ran over to see what it was and found the corpse of Jon Battle-Born. The game had placed him 50 feet above the path he was meant to be walking on, and he fell to his death.
So..yeah..uh, I'd advise against using "Wait" in heavily populated areas.