ps2 controller input setting freeze Thread - Megabyte Punch

Hi! I just tried playing Megabyte Punch for the first time. I went into the input settings to set my controls. I'm using a ps2 dual shock controller via usb. I was surprised that I was already able to move through the menus and such without even configuring it.
Once I got to the input controls, I set "attack" to circle. When I moved down to "special ability" and I pressed X to choose a button, the game stopped recognizing input. No buttons on the keyboard or controller did anything, but the sound kept playing. The listed key (Z by default?) did not change to "..." as if it were waiting for input. I couldn't alt-tab or press ESC. I was able to ctrl-alt-del and bring up the task manager and kill the process.
I repeated these actions and it did the same thing. I was using the controller to navigate the menus; dpad and X button. However, if I use the keyboard to select special ability, it works fine. I plugged in my 360 arcade sitck, and it worked fine too.

Also, swapping which controller was plugged in while I was at the input screen froze the game in the same manner. The game isn't frozen exactly, but it doesn't respond to any input, and it is either locked on top or intercepts inputs, so I can't alt-tab or open any other windows to take focus. Windows key doesn't work either.
One more thing, using the 360 fight stick as a controller, the direction buttons wouldn't map correctly. By default up and down were reversed, so I set the backwards. After changing them, they worked correctly in the menus. But once I got into the game, up and down were still reversed. The setting in the menu had no affect except in the menus.

Hmm odd stuff going on, we'll have a look. Maybe a lame suggestion but try updating your driver for the PS2 controller?