Yes, this always bothered me with ArmA 2. I use a Logitech G13. The way it works now it's not worth using the analog stick for infantry.

+1

Noticed this too, makes it very annoying to use.

Edit: It seems fine when you're stationary. But use freelook while moving and it happens. Look down in free look and release while moving, and it'll move your aim to the point you were looking.

+1

This is the one thing that will make it or break it for my friends and I. If the AI is too hardcore, they'll be forever turned off from ever playing CO-OP again.
Playing alone on regular I am constantly getting shot through vegetation and trees without having the visibility to return fire myself. Or getting spotted out of nowhere. There doesn't seem to be alarm stages of the AI, they're either oblivious to your presence, or they're engaging you with super human accuracy.

Are there any details on how the AI detection mechanics actually work?

DayZ actually has the right idea about stealth, with visibility and sound radius changing according to your movement, terrain, and stance.