I've set my null zones to zero, and turned up sensitivity for the controller but my issue is different and shouldn't have anything to do with controller sensitivity. There is a significant delay in panning, even using the keyboard and it's quite annoying. It is worse if the frame rates drop, but even in FSX, the frame rates can be very low but there is no delay in panning.

 

Curiously if I hit the pause button, the noticeable delay is gone. Any ideas?

I fully agree - have/had the same issue. I think it all boils down to FPS, which for me was greatly improved by means of disabling Hardware Tessellation. Triple Buffering also apparently can cause this.

Not sure if that's the case.  Even if I am seeing 40-50fps in some areas the delay is still there.  I tried disabling tesselation completely and the delay was slightly less but still present.

 

I have a funny suspicion it is closely related to the same delay we get when accessing menus.