I was thinkiing of this whilst reading the worst plot thread. I was going to mention Dead Space but the more I thought about it, the less of a problem I had with the plot which I quite like and more with Isaac himself.
Here he is, an engineer on a starship thats had constant power & light issues with monsters hiding in the dark and only the light on his gun to stop him tripping over corpses. He walks through countless maintenance areas, repair bays and storage rooms which contain tonnes of random bits & bobs, what sort of freakin moron WOULDN'T find a torch and some gaffa tape and strap it to his helmet?
So what other gaming characters have made outstandingly stupid decisions?

Well that one should be applied to Doom 3, I think Dead Space was pretty well lit

Half-Life 2 series
EVERYBODY: Gordon, you're alive! How are you? We love you! What are we gonna do?
GORDON: ...

When the fat Barney in Half-Life: Opposing Force grabs the electrified fence.

heh, yeah, I kinda wanted to mention that :D ... Well, Gordon talks trough actions :D

Actions speak louder than words?

Well if it's completed by rocket launcher

Right...
GORDON: Yeah, baby. I think you're hot too, and I want to get you into bed as soon as possible. And to demonstrate that, I'm going to ignore everything you say and shoot this alien in the face (provided that IS its face). I'm the only nuclear physicist in the world who can't put together a coherent sentence.
I've heard the official arguments: "No, Gordon doesn't speak, because we want the player to identify with him personally, and him speaking would ruin the illusion that the player IS him". Frankly, I think it's bollocks. The fact that he never utters a word is what ruins the illusion.

British / Australian (I guess) English: Torch = Flashlight. No fire involved.

I couldn't agree more. Actually, I loved HL1, but HL2...-shakes head-. It's amazing how Gordon:
1) Cannot even climb a bloody wall that's only up to his head. Yeh bro, use your stupid Ph.D and figure out how to get up that wall, by stacking bricks on a plank to form a seesaw. What, Gordon only weighs 30kg? The man who singlehandedly trashed Nihilanth and weighs less than 4 sacks of rice? Hell in Singapore, serving the army is compulsory, and people who can't climb a wall that low are laughed at
2) Is destined to reach his destination no matter where on earth he is. Oh boy a bunch of housing estates next to the trainyard next to the sewers next to God-knows-where-but-it's-somehow-all-interconnected. Brilliant mappers, brilliant writers, you have to credit that to the geniuses at Valve
3) I have to repeat this again: Gordon has to use incredibly stupid methods to get to his destination. Putting barrels under a plank to float it up is quite possibly the lamest thing I've ever seen in a game. Apparently someone at Valve's run out of ideas to showcase their physics. If Doom 3 was a graphical showcase, HL2 was a physics whore
I just felt that whatever immersion I felt in the first 5 mins of the game was completely broken by the next 4 hours. The level designs didn't make sense and felt like 1998 all over again. The game had some intense moments, but I just can't scratch off the feeling that everything feels so tacked on. Game of the century? Meh.

I have to admit that I thought HL2 was crap. The only reason I finished it was because it was a present and I was really REALLY bored. Then again, I hated HL1 as well
As for the torch, I should have said "some kind of light source" to remove the flaming torches thoughts. A flaming torch would just die out in the vacuum sections anyway

sort of, in comparison between hl2 and hl1, hl1 is more feasible, because the character could just be in shock, and any great lengths he's going through, is sort of just to escape with his life. in HL2, he comes in on a train, and meets Dr. Kleiner, and Barney, and everyone, and he's found a nice little safe haven. Then just because he's told "oh go here." he goes on some crazy long trip? Why not just find a safe place and forget about it. He almost instantly signs on to the rebellion without a word. That's ridiculous.

Interesting topic, I think there is a lot of characters and NPCs who are stupid, but its nothing to do with the A.I or physical limitations of content, but rather easily introduced characterisations which simply aren't implemented.
I think the out right dumbest character I've come across bests Gordon Freeman by a country mile: Lea Nichols from 'eXperience 112' also known as 'The Experiment'. You're not directly in control of her though, in fact you play as yourself in control of a security system and direct her around by flicking lights on and off and viewing her actions via cameras. Lacking direct control over this character would drive any Saint into a murderous machete and vodka fuelled rage .
I have never met such a frustratingly thick person in all my life, as you'll be flicking those lights on and off more than a chimpanzee on speed. Not to mention that obvious solutions to puzzles are often visible to even the dimmest of morons, but will require you to spoon feed her an answer. Also she go from being totally freaked out by dead bodies to having no problem at all. She will eventually search them as long as you pump those switches on and off like you've got attention deficit disorder.
Her logic is boned too, she'll look dumb-faced at problems and ask someone who cannot directly answer (you) for the solution to be provided at haste. Then bug you when she thinks your taking too long, and afterwards actually reveal she knew the answer all along.
I swear if I could have climbed out of my security booth and bludgeoned her to death with a lead pipe I would have happily done so.

the entire cast of final fantasy 8..