Same problem here. I get the desync error for my 360 pad with all builds I have tested. If I Disable panic handlers the controls stop working without displaying the error. This only happens for me in New Super Mario Bro's and all other games work fine. Someone in another post was saying you need to patch the main.dol for the PAL version to fix the error. Though i'm not sure what this entails (ppf-o-matic?) or if it works as I cant find a patch.
Windows 7 Ultimate X86
Windows 7 Ultimate X86