So I noticed that while playing rayman 3 with the wired 360 controller, that rayman starts to slow down when I'm moving diagonally, but goes full speed when going forward, backward, and to the side. any way to fix this?

This also happens with me. It seems the only fix is recalibrating the controller, so try that.

I found a way to get this to work perfectly. Download DXTweak 2 here (despite what the website says it is compatible with Windows 7 and 8). On the joystick axes, set min to 15, center to 127 and max to 239, and then the controls should work.