Climate models are certainly improving, albeit more slowly than many would hope for. They are far from perfect.
Paul Valdes from Bristol University has an interesting paper in the last issue of Nature Geosciences about the reliability of climate models. He basically claims that climate models fail to reproduce past climate, in particular some abrupt climate change that happened in the deep past of Earth's history. This is not really a scoop, as Paul Valdes explains in this interview with Quentin Cooper in Material World, a BBC Radio 4 program. Does it mean that climate change will be worse than so far predicted by climate models ? Answer: we do not know.