In the CLOD controlls menu, what are the sensitivity sliders set to for your axis?
At 0.00 sensitivity the output ingame will match your inputs 100%, and thus react faster but also be more jerky.
At 1.00 there will be a delay, which smooths out spikes.
I also guess your joystick reacts normally in the windows control panel and other games? If not the problem most likely isn't CLOD.
Had a similar issue years ago with LFS where my steeringwheel lagged and stuttered ingame. Turned out if was because the USB controller couldn't handle the wheel, USB-headset and other gear all at once.
Removing the headset fixed it in my case. So try unplugging all other USB gear and then test every port with just the jostick connected.
As a final effort, if the rest doesn't work, you could try upping the USB polling rate. Some devices don't like it though, so it's up to you if you want to try this.
Can slowly up the polling rate from 125hz to 1000hz and see what it does.
http://www.techpowerup.com/forums/sh...d.php?t=106653
If you have a monitor with high inut lag, an older computer that struggles with CLOD and a joystick with say 10ms lag they might combine to give the delay you describe too.
Then it's a case of finding the culprit and replacing it.
So if you can, test the joystick on another computer ,test it on your computer with a different monitor, test another joystick with your computer, etc etc untill you can pinpoint the culprit.
Cause can be something as silly as a front USB-jack having a bad connection, one of your USB controllers being faulty, ...
Could be anything really and the only way to find out is testing ,testing and more testing.