"The Fix
The game is unplayable after the first couple of levels due to the ridiculous amount of screen shake. Many guides online will tell you to limit FPS to 30. Limiting FPS to 30 will not fix this.

Instead, go to the install folder of the game. It should be located in your game folder. Starting from there, you want to go to Games > Star Wars - Starfighter > Game and open the file named AutoExec.con in a text editor (windows notepad works fine)

The shake effect gets initialized on lines 29, 37, and 41:

CreateGOB CShakeCtrl, _Shake
CreateGOB CShakeCtrl, _Shake2
_Shake2.SetPlayerNum 2

You can remove the effect by either deleting or commenting out those lines. Personally, I prefer to comment out the lines in case I want to revert to the "authentic" experience without having to reinstall (or copy the original file and save it in another location). In order to comment out, you want to prefix the lines with "//", so they'll look like this:

// CreateGOB CShakeCtrl, _Shake
// CreateGOB CShakeCtrl, _Shake2
// _Shake2.SetPlayerNum 2

Open up the game, and viola: no screen shake.

As far as I can tell, this disables screen shake both for when you are damaged, and for when you accelerate."

This fix works. I didn't really find the shaking to be too bad, but when you use this fix, it totally disables the shaking, so it does change the game experience for sure. You won't shake when you use thrusters and when you are hit, however, it is kinda hard to tell when you are hit since this disables the shaking feature completely.

I may use the old file and reintroduce the shaking again. Not sure yet, but I can confirm this fix does remove all camera shake.