Here's a form post that goes into it.
Make sure you have analog button enabled on your controller. Go to options. You have to press "Select" (if I recall correctly) in the controller config screen (it should tell you at the top of the screen). Then you select "Steering" and press left/right on the d-pad to select analog/digital steering.
Disclaimer: I haven't had to do this in years, but that sounds familiar.