I came across this a couple of nights ago, and my housemate and I were playing with it last night. Basically, some clever chap has managed to make your PC emulate a PS3 controller through bluetooth, allowing you to re-bind all of the gamepad controls to whatever peripherals you've got on your PC, including your keyboard and mouse. Here's a video of the creator using it for CoD:
It's only supported in Linux at the moment, so if you don't have it already, grab Ubuntu and install it to a USB drive or use its fancy Windows installer which doesn't require and drive partitioning. I've also read that it's a pain to set up with non-Debian distros, so it's probably best to just stick with Ubuntu.
It's not perfect yet, and some games (like Killzone) are just set up bizarrely so they still feel a bit off with a mouse, but if you get it working, it's going to shit all over a gamepad, as you can see in the video.
it is becoming like the early days of computer, where "consoles" did entertainment and slight computer work (i had a dick smith computer in the early days, two joysticks and buttons but they made a full keyboard when you put them into the console)
>>>edit, just for you midda, i put it there, (sorry for the trauma)
The problem is that each game has a different setup for the look sensitivity. Killzone for example is intentionally made to feel what the developers call "heavy." Really, it's just laggy and has a stupid amount of acceleration on it. Other games like CoD translate almost directly to mouse controls because they're made to be more sensitive to your input. This means a mouse will feel very different on those two games without a lot of tweaking for each individual game. This is why the XIM3 for Xbox 360 is popular, because it's a pretty smart device with specific settings for different games.
This application gives a fair bit of control too, allowing you to customise settings for each game. This gives it more potential than things like those FragFX controllers, but you're still limited to emulating what's actually possible with a gamepad.
I gave this another proper whirl last night on Killzone 3. The look-acceleration on that game is a real problem for achieving results close to a normal mouse, but I still managed to get a setup going which at least felt more comfortable than a gamepad. The broad mouse movements were almost spot on (apart from a little lag), but the really subtle movements were almost non-existent due to the acceleration. Anyone else who's got this up and running and would like to try my Killzone profile, just say so and I'll be happy to share.
Even with the mouse though, I still got killed plenty of times by people who are experienced with the gamepad.