Ok so I got it working. I was able to get my classic controller and PS3 controller to work.
Even in the basic loader the button mapping is set to resemble a gamecube controller and does not follow the letters on the controller. Basically the loader tells you to press X to mount USB but to do that you have to press the A button on the classic controller, I would assume this is the same on a procontroller but I don't have one.
The button mapping makes sense for gameplay but is confusing in the loader.
Tested Mario sunshine. The classic controller is messed up for light trigger presses. R1 is mapped to Z and R2 and L2 are the triggers, but you can only press them all the way (click them). This means there is no way to squirt water while running with this controller. On the PS3 controller its mapped the same and that analog function works, but something is a bit off, it seems to be harder to squirt and run and the stream sputters out way faster than when using a gamecube controller....maybe its just me.
I seen mention of being able to change the button mapping....any idea how to do that?
So while this is cool, wavebird still seems the best way to go for me.