Well, the joystick's control input range is from -100% to 100% on each axis, but the curve which it makes on the way does not need to be linear.
On a linear response curve, if you move the stick 50% to a direction, the control input will be 50% to that direction. And certain angle change of the joystick's handle is always the same change in input values, whether it's near the center area or close to the edges. As a function plot, this curve is linear, ie. straight with constant slope.
However, if the input curve is exponential (or logarithmic depending on your viewpoint on the matter), it means that N degrees movement near the center affects the input values less than towards the edges of the range of movement. If the curve is smooth, it is a very instinctive way of adjusting the sensitivity and allows far greater accuracy near the deadzone, which is especialyl important for game like FS2. However, the curve that retail FS2 and FS2_Open uses is not exactly smooth, which causes the transitions from "low sensitivity" to "high sensitivity" to be rather abrupt, and in the end I have noticed it serves almost no purpose at all.
Test the joystick builds at lower sensitivity settings, and you should be able to tell the difference pretty soon.