Justin mentioned a couple of times that the d-pad gets better with 6-8 hours of use. I suspect he's trying to blow off this problem. Clearly many peoples d-pad problems don't go away with use.
Not sure if I've put in 6-8 hours but the crunching noise this thing makes is grotesque. Also, after following my own advice of extended "thumb exercises" the problem mostly gets worse. As AztroZombie stated, paint just accumulates on more than one direction overtime and soon enough, all directions feel a bit "sticky".
Some people have reported having no problems at all, which makes me wonder if on units that are experiencing the problem is the d-pad bigger or the hole cut smaller? Or is is a sloppy paint job?
Can anyone with a seemingly perfect d-pad take a really close picture of it?
Also, I tend to wonder if the problem can be remedied externally. Move the d-pad in the up position, then file away the bottom and edges of the down direction. Repeat for all sides. You'll probably want to do this with the unit upside-down so plastic shavings don't get in your unit...