Lewis Black said it best when talking about Republicans, Democrats and how they come up with ideas. If anyone doesn't get that reference look it up, it'll fit this perfectly when/if it ever comes out.
@ Microsoft - Part of the problem is the fact the D-pad is already too far off of the controller board, raising it up any further is just going to make it worse, and who wants a D-pad that's either going to turn on them in the middle of a game or be solid enough not to turn accidentally and be a real pain when you need to? Furthermore, who wants to have to turn the thing at all?
Here's a good idea for you, get yourself 25 or so gamers that despise the way the D-pad is now, you won't have to look very hard for them, and then use them as your test group instead of whatever few guys that seem to not ever use a D-pad that you have on the project now. Granted you'll probably get 25 different ideas on making it better, but I bet none of them will be the one that you all came up with, and there's a reason for that.
Get some actual gamers involved in this to give you feedback, the ones that don't play games that are heavy on the D-pad because of the way it is, not the ones that use it and think it could use 'some' improvement, the ones that know it needs work and why. Then you should not only listen to that advice, but follow it, and then let your engineers figure out how to do it, instead of over complicating it more than it needs to be like your last 'improved D-pad' attempt.