There's enough people who do like the stick to put new buyers at ease. I'm very happy with mine, and prefer it to a D-pad. I *would* like a slightly smaller deadzone, but I don't let that bother me. Growing up with C64 joysticks, this is a luxury
Last week I let a friend play with mine for a while, and he went out and bought his own immediately. I had another friend have a "quick look" and he sat there for two hours playing various games. I warned both that some people hate the stick, but they said they didn't even notice.
I think it breaks down to this:
Group 1 - Mk1 sticks, which by most accounts are seriously flawed. Still usable, but with bias problems and larger deadzone.
Group 2 - people who have faulty sticks but don't realize it. The stick unit is admittedly poor quality and breaks easily. Mine has "come loose" twice, and while I managed to get it back into place, it is a worry.
Group 3 - people who are so used to D-pads, the stick just feels weird.
Group 4 - people who are genuinely bothered by the stick for whatever reason. Maybe it doesn't perform as well in their favorite style of game, or they just don't tolerate the flaws.
Then there's the silent majority (yes, majority), those who are quite content with the stick and feel no need to complain.
To put it into context, there is only one current handheld with better controls: the Nintendo DS. IMHO the GP2X has better controls than anything else, including the PSP, Zaurus, Gizmondo, mobile phones and all of the Pocket PC types I've seen. Does that only make it the best of a bad bunch? Maybe.
I still don't think the GP2X cap design has been perfected. My thumb slipped on the Mk2 cap, making fast side-to-side or up-down movements more difficult. I drilled out an old Xbox stick to make a cap, and now it plays brilliantly for me. Others have put a dab of hot glue on the four ordinal directions. Both give greater grip and allow your thumb to stay in the middle. People who don't like the stick could try these options if they don't want to resort to a D-Pad mod.
btw D-pads do have a "virtual deadzone", which is the distance your thumb needs to travel to change direction. The PSP's is massive because it's a discontinuous design. OTOH the GBA's was miniscule. Just having a D-pad doesn't eliminiate this--it has to be a GOOD D-pad.
And I absolutely applaud DaveC for supplying that option to people. It can only help sell GP2Xs if people know they can change things down the track if they don't like it.