In Win95 and Win98, there was a check box option that said "poll with interrupts enabled".
This doesnt apply to USB sticks, and may be part of the reason WinXP has problems with gameport stuff.
Polling is the process Windows uses of "talking" to the stick, determining the position of the controller in the most basic sense. In fact, the "high speed" gameports were developed because with the older ones a joystick used up so much of the CPU time with polling that frame rates in games took a noticeable hit. This was one of the reasons Quake addicts refused to use joysticks and used only mouse and keyboard. I'm assuming its also the biggest drive behind creating digital sticks that plug into USB ports and actually send their information to Windows instead of having Windows poll for it.
As for the spikiness, that is most likely a combination of cheap parts on the joystick, and cheap parts in the gameport. In the days before USB made high-speed gameports pretty much obsolete, the high quality addon cards included not only a high speed "digital" gameport to cut down on CPU hits, but also a filter to reduce spikes in the signal. I can remember playing AW under Win95 and that was one thing people had trouble with was either using the gameport that came built in to the computer or using one on a cheap sound card. The special built gaming rigs smoothed out the spikes for you and really worked much better.
