I'm a long-time user of this particular product and a mod at the forums (which I won't list here out of respect for other mods). I just wanted to clear up a few misconceptions.
1) The XIM doesn't allow you to do things you can't normally do with a controller. It doesn't aim for you. It doesn't allow you to run faster, turn faster, etc. It is still limited by whatever a controller is capable of doing within the confines of any particular game or engine.
2) I understand some people may consider this cheating, but many of us really argue that it isn't. For fighting games, arcade sticks > fighting gamepads > standard 360 pads. The price difference between a quality fighting stick and a standard 360 controller is $100+ in many cases. Fighting sticks allow you to pull off combos and moves in Street Fighter IV that just aren't possible with a standard controller. This is really no different. Not all Arcade Sticks are licensed... and some are even homemade from arcade cabinet parts.
I use to be a competitive PC gamer (Quake 2 and Quake 3). I also use to have a huge chip on my shoulder with regards to how well the M&KB performs over gamepad users in console FPS games. I now realize the gap in skill isn't nearly as great as many proclaim it to be. I've gone up against some VERY good controller users - some of the best the console community has to offer in various versions of Call of Duty. How did I fair? I held my own - which is what you would expect... about 50/50.
How is this possible? Console versions of games do all sorts of things that PC versions of games don't do to "prop up" the weaker input device (gamepads). Some of these things are: Lower fields of view, auto-aiming, sticky aiming, bullet magnetism, slightly enlarged hit boxes, etc.
The biggest reason this is possible however... is just skill level. These console players are the cream of the crop. They have been playing with thumbsticks for 5-7 years. This combined with aim assist allows them to be on EQUAL footing with gamers with a mouse and keyboard.
Now, before people go off and say it isn't fair... why isn't it? I've been playing games with a M&KB for 15 years or more. When the rest of you thumbstick users catch up with that experience, I'm sure the playing field will be even easier.
Look, the goal and spirit of XIM is not to give an unfair advantage. The goal is to take gaming experience and, quite frankly, a much superior input device, and translate it to a gaming platform and community. The PC is dying off. XBL offers many great things that PC platform does not (but it also lacks many cool features... but that is another topic). If we want large competitive communities without hackers, aimbots, etc... then XBL is one of our only choices. Why should we have to "step down" to an inferior controller?
Personally, I wish MS and Sony would just release a gamepad with a trackball for a right thumbstick or just properly support M&KB in games. Until then, this is our only option for enjoying the types of games we love. If it seems unfair to you... it should. We have been playing these types of games on the best input device for it... for a much longer time. If it doesn't seem unfair to you, it is probably because you are use to thumbsticks and are just as good or better than us... and kudos to you.
You wouldn't play Rock Band with a controller.
You wouldn't play Gran Tourismo with a controller.
You wouldn't play SFIV with a controller.
But why are many of you okay with playing Call of Duty with one? If anything, I'm surprised more of you aren't cheering that the best input device for the FPS genre is finally real.... and yes, it works fantastically (check the forums and the testimonies if you have any doubts). Why do many of you want aim assist and other game crutches to make an inferior aiming device palpable... let alone preferable?