Are you using the ps3 controller?
Yeah, I used the digital pad, though I use the analog stick at times. It was the sixaxis sans rumble, if that makes any difference.
Can you adjust deadzones?
Don't know if dead zone's correlates to dip switches, but SSF2THDR does an option setting to turn various dip switches on and off. I didn't bother looking at in depth, as I'm sure only the most ardent of Street Fighter fans know what the terminology means and does. Maybe there's something there to help out with deadzones?
I'll try to convince one of my cousin's to download for 360, though I've been told that the 360's d-pad is abysmal. Any truth to this?