Randall415: I had this problem running some old dos games in DOSBox before. It is a config issue for joystick in DOSBox itself. Go into the Shattered Steel folder, double click dosbox.conf, click "select a program from a list of installed programs" then ok button. Click notepad then ok button. The screen that opens up is the config settings for dosbox that runs this game. Read the top three(3) lines, then scroll down to where it says joystick on the left side. Just below joysticktype is timed=true. Delete "true" and type in false. Exit and save and then run Shattered Steel. If that doesn't work, start experimenting with joystick settings in dosbox.conf until it works. Hope that helps :). You will need some patience. Be sure to read what each setting does first, then try to find the best one to match your joystick.
Yup! I had the same issue as everyone above, as soon as combat starts, the mech starts spinning. Kreedog's solution worked perfect for me, though it took me a bit of time tweaking the in-game options to get the controls I wanted.