Just a quick guide for those poor souls who still havent figured out why app.pcon doesnt work properly on their Xperia Play's.
Step 1- explained bellow, from setting up the program to using your Xplay as controller.
1) Before anything, make sure your slide is open.
2) Go to the settings -> WIFI/wireless network -> Sharing/VPN and either use WLAN sharing or USB sharing (USB can be kinky sometimes, especialy if you have a bad USB port or too short USB cable)
3) Now if your PC can acces internet through your mobile (or atleast shows "only local" in internet settings) your sharing is working properly and you can open pcon v1.3 (.jar)
4) Open app .pcon on your Xperia Play (!!must have slide open!!)
5) Click "Connect to Android" on your PC
6) Check your Xplays IP address inside the app (top left corner)
7) Insert the IP on PC and press enter
8) If your phone vibrates, it means your connection is working >>>KEEP THE SLIDE OPEN<<<
9) !IMPORTANT! CONNECT IN JOYPAD 1 MODE
10) make sure joypad 1 is working (be sure you have set your key bind correctly in app's settings)
11) If its working, press "back" to return to the menu.
12) !IMPORTANT! NOW CHOOSE JOYPAD 2 (XPERIA PLAY) MODE
13) Test your your control's functionality again, it should be working now !
-Always keep an eye out for your sharing, if you use WLAN, remember that locking it with password might be the most secure way, if USB, make sure you are still sharing your connection, sometimes things can get kinky with USB...
-Never close the slide when you are using the app because it closes the connection between your PC and Xplay.
-You can leave app.pcon running while you check your email and such, it wont break the connection.
-X button seems to be delayed (you must hold X for a while to get desired action on your PC screen) so for any fast action you should stay away from X.
This caused alot trouble for me, simple minded fool, so I hope it helped someone else out there.