It is not a bug, it is a feature.
Current restrictions are:
GROUP BY is limited
HAVING, ANY, ALL are currently not implemented
No triggers and views
The size of Binary data is limited to about 32 KB (because UTF is used)
No server side cursors (here is a workaround for selecting big results)
Empty space in the database file is not always re-used (here are the details and a workaround)
This info is an extract from hsqldb doc in their latest complete download from http://sourceforge.net/projects/hsqldb/
Thats too bad, so now i think i will have to move to mysql or some other one, Any suggestions on which database works best.