I played with deadzone and sensitivity settings too, but I couldn't work it out. Actually I can aim to a target very precisely if I turn very slowly (so the problem is not related to deadzone). But when I'm required to perform quick maneuvers during dogfights I always overshoot my target.
Since Newtonian physics has been partially implemented in Diaspora, I think my issue is related to inertia. I'll try to explain: when you want to change direction, you push hard your analog control (joystick or gamepad), and the corrispondent truster fires. But when you start releasing the stick, the same truster simply decreases its firing power accordingly to the stick's position. But this doesn't actually stop the movement, because the truster (i.e. RX truster for a left turn) is still pushing and there is no compensation from the opposite truster (SX in this case), which would force the movement to stop almost instantly.
So, I'm afraid the solution would imply to re-write the control scripts, in order to force trusters' compensation ignition. Let's suppose I am pushing a left turn (RX truster is firing): I'm currently pushing the stick to the left (-255 on x axis). While my nose is getting closer to the target I start releasing the stick. The stick is still in the left half of your x axis but now, actually, it's moving towards right (-200... -170... -140 etc), so the imput relative value is increasing. And this is the moment in which the compensation ignition should start: when the imput relativevalue start increasing! Not when it becomes positive (that would mean that your stick has entered the right side of the axis). Of course, trusters' compensation should be stronger when the imput absolute value is higher.
Theoretically I think this would work, resulting in a better handling. But I don't know how to translate this into code. I'm not so skilled, sorry! Is there anyone who can do it?