We have used the wireless Logitec gamepad without any connection issues, but the sensitivity for machine control is not what we were looking for. The little thumb button did not give the operator a good "feel". That's why we started down the path of a feedback joystick, or at least a full sized joystick.
Could it be the usb cable picking up RF noise? Might try shielding it.
Is there a joystick configuration file that would allow modifying the choice of control axis/stick and sensitivity on the gamepad?