Issues in (M)atrix Model Compactification

We discuss issues concerning (M)atrix model compactifications on curved spaces. We argue from the form of the graviton propagator on curved space that excited string states do not decouple from the annulus D0-brane $v^4$ amplitude, unlike the flat space case. This argument shows that a large class of quantum mechanical systems with a finite number of degrees of freedom cannot reproduce supergravity answers. We discuss the specific example of an ALE space and suggest sources of possible higher derivative terms that might help reproduce supergravity results.