I've seen many complaints about the xbox controller not working (especially the wireless ones), and this fix may apply to you. Many computers have a default gamepad called "HID Compliant game controller" or a "6 direction 24 button hat switch". The problem is the game recognizing the HID controller (which is really nothing, its just always on in some pcs.) as controller 1, and the Xbox one as Controller 2. So...
1. Go to Devices and Printers
2. Right click on HID-Compliant game controller (or whatever the unused controller is)
3. Click Properties
4. Go to the Hardware tab, and click on the HID-compliant game controller. Click properties in the bottom right.
5. Click on the Drivers tab.
6. Click "Disable"
Thats it! Now, any game you play, including Psychonauts, will detect your Xbox controller consistently. This solves the controller issue in many other games too! I hope this helps.
Also, a very simple patch to change the on-screen buttons, to that of the Xbox controller, for easier gameplay. (instead of wondering what to do when it says to press 'e'" http://dl.dropbox.com/u/75754626/PsychoPadLite_v1.1_install.rar