I use the analog. Here's what Kazunori Yamauchi had to say in an interview about the subject.
"wit the three different ways to drive (analog stick, digital pad, and racing wheel) what is the best? What control scheme is gets the best results?
"The digital pad and the steering wheel are the best in terms of balance," Kazunori said. "The analog stick may be a little difficult to maneuver because of the way it is designed. The analog stick is actually where we had to tackle the most problems because the digital pad somewhat estimates what the player is trying to do in terms of left and right--depending on how fast you're going. The same with the steering wheel--you turn left or right depending on what you want to do. However, the analog stick, the way it is designed, there is a tendency for the player to just kind of turn."
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I'll stick to the analog, I get my best results from it.