Island tavern with substandard operating system (8)
I believe the answer is:
barbados
'island' is the definition.
(island nation)
'tavern with substandard operating system' is the wordplay.
'tavern' becomes 'bar' (I've seen this in another clue).
'with' means one lot of letters go next to another.
'substandard' becomes 'bad' (I've seen this before).
'operating system' becomes 'OS' (synonyms).
'bar'+'bad'+'os'='BARBADOS'
(Other definitions for barbados that I've seen before include "Island in West Indies, capital Bridgetown" , "Caribbean nation" , "Independent state in the West Indies" , "tropical island" , "Bridgetown is its capital city" .)