To resolve most controller issues, disable any compatibility settings and reset controller options to defaults.
To do this, right-click the game's shortcut, go to Properties -> Compatibility and try disabling the compatibility before attempting to launch the game again. If this doesn't help, please try re-enabling compatibility mode, but try different settings of it, starting from the most recent (Windows 7, Vista etc.).
Now, in the game itself, go to joystick controls settings and set "defaults".
This should also help with button mapping problems (like Button 1 being bound all the time).