Is it cheating to play driving games with a wheel?
No as Forza 2's online leaderboard displays, pads are as fast as a wheel (in fact more often than not the pad players have a faster time than the wheel players). I assume Forza 3's leaderboard would show the same but i haven't had a chance to look.
CBA, i'm going to assume it would be the hypocritical 'no' I was expecting.
Sorry to ruin your expectations.
[EDIT] Oh and before someone brings up fighting sticks (which are arguably better) certain games or characters play better with a pad over a stick. I still play better with a pad in street fighter 4 despite using a stick for about 6 months now. Afaik using a stick in Tekken when a pad is available is considered a bit... strange. But even if the fact that sticks are arguably better than a pad is pushed i would argue that the difference is far, far smaller than the difference between a pad and a mouse and keyboard for shooters. I'd also point out that fighting games are designed for sticks on all platforms and officially supported peripherals are freely available on the market and are in fact encouraged by developers. These keyboard and mouse adapters on the other hand are not.
To put it short, a mouse and keyboard boasts a huge advantage over pads in shooters, much greater than any other peripheral has over a pad in any genre.
Sit a top class street fighter player down with a pad and he'll still beat seven shades out of everyone, give a shooter player a pad against other K&M players and he won't fare well at all.
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