This annoys the heck out of me too.

I'm experiencing the same issue with the snapping while looking up and down. The combination of TrackIR with Aiming Deadzone, however subtle you set it in Arma 2, really does a whole lot for immersion IMO and when you're used it it, as Lordprimate put it, playing without it just plain sux. It's completely stale. Aiming Deadzone is by no means obsolete just because the Big D doesn't prefer it. Your attention to this issue would be greatly, greatly appreciated.