Within the last decade, significant progress has been made in modelling rotating stars in general relativity and in relating observable properties to the equation of state of matter at high density. A formalism describing rotating perfect fluids is presented and numerical models of neutron stars are briefly discussed, with emphasis on upper limits on mass and rotation. The equations governing small oscillations are reviewed, and a variational principle appropriate both to eulerian and lagrangian perturbations is obtained. This extends to relativity an eulerian principle used to find non-axisymmetric stability points for perfect fluids. A related eulerian approach has been recently used to obtain normal modes of rotating newtonian stars. The review concludes with an outline of this work and of the two types of instability that can restrict the range of neutron stars. In particular, current work shows that several kinds of effective viscosity limit the possible role of a non-axisymmetric instability driven by gravitational waves.