It’s interesting to read GRRM’s high praise (there are spoilers) for Tamzin Merchant—formerly cast as Daenerys in the pilot for HBO’s Game of Thrones—and her performance in the fifth episode of the Tudors. It’s very clear that he’s saddened that she will not be continuing on with the series. Obviously, the reasons for Merchant’s departure from Game of Thrones are unknown, and may never be revealed, but it does not seem very likely that it had to do with GRRM (and perhaps other producers?) having any issues with her performance.
No decision has yet been made in casting for Daenerys Targaryen, from what GRRM has recently indicated, but we expect it will be nailed down by the end of the month or, at the latest, the beginning of next month.