I think Jensen might have been suggesting this, but I was considering the controls last night, and realized I've been wrong.
Like some others here, I thought of playing with the controller held up in front of me and turning it left and right, much like a real steering wheel.
Now I'm thinking a second way is possible that might not be quite as similar to actual driving, but it might be more comfortable and natural. Instead of holding the controller up, perpendicular to the ground, you hold it in your lap, parallel to the ground as usual, and you tilt it left and right. This is how I used to play racing games (tilting left and right, not holding the controller up and turning it like a steering wheel).
I'm guessing Nintendo will either use tilting rather than turning, or maybe we'll be allowed to choose between the two. I was thinking of how the remote might work with Mario Kart...hop by flicking, turn by tilting, powerslide-boosting by tilting back and forth after hopping...you'd really get into controlling the Kart directly, I think it would be easier and a lot more natural than the current Mario Kart controls.