I used to have no problems with need for speed most wanted and a steering wheel. It sounds like your steering wheel is not calibrated or something. Have you tried with the keyboard with the wheel unplugged from the usb (not just the power, my Driving force pro still steers without power, but no force feedback)
Logitech has some tools for calibrating here, don't know about other wheels: http://wingmanteam.com/latest_software/gadgets.htm

Edit: Oh, and for a proper physics engine, why not try: http://www.lfs.net/ (There is support built in for head trackers, so maybe you can use your helmet for racing)