You guys really know how to make a guy feel loved.

Anyway, to expand on my earlier thoughts on an analog D-pad, I started thinking about a previous idea I'd toyed with for an analog controller for a portable system based on the
NES Max. It had a different kind of D-pad designed to prevent Nintendo Thumb or something. There was a concave red thing (Wikipedia calls it a cycloid, so I'll go with that) that you put your thumb on, and you slid it around inside that black circle you can see in the picture, pressing down like you would on a regular D-pad. I think if you could make the cycloid self-centering and detect its deviance from center, it would be a perfect analog control for a portable.
The problem comes in making it work as a D-pad. I finally realized that instead of putting the analog control portion in the D-pad, copying the look of the Max, you could put a D-pad on the cycloid. Obviously, you wouldn't want to try to use a D-pad that's sliding around, but if it could be locked it place, I think it would work pretty well. Whichever control type was best for the game you wanted to play would be in the same, hopefully ergonomic position, unlike every dual analog controller. We'd just have to have plenty of rope on hand to lynch any developers who think it's a good idea to use the D-pad as four L3 buttons.

Okay, so there are still some flaws, depending on how you feel about that.
Actually, come to think of it, there could be interesting uses for that if it were thought of as similar to the digital click on the Gamecube shoulder buttons. It would be hard to hit digital right while pushing analog left, but if you're pushing all the way to the left, it would be pretty easy to hit left on the D-pad if you wanted. That could be useful for all sorts of "and I really mean it!" input, like putting on an extra boost of speed, or roll dodging, or paging through a menu.