What is it? im guessing from my experience with the awfull time I had with driving with a pad it's some sort of software smoothing of the raw input data.

Oddly enough Google's first result is my gamepad guide, so...im kinda chasing my tail here. Nothing to be found in the manual either.

What setting is everyone using?...So if you've got a wheel, ASS(analouge Steer Smooth that is)should be null, right???

It prevents "noise" from the steering input - potentiometers sometimes aren't totally smooth (unless they're [clean] optical potentiometers) and it can cause the input to jump around. Using it smooths out the jitter but too much of it will induce controller lag.

i dont use any, instead i use about .15 of the steer centre reduction, or something similar. steer smooth delays your input whereas centre reduction matches it more to your wheel actions whilst still smoothing your input a bit without adding too much of a delay.