Well after messing with it for a whole day I figured it out. I dont know if this is just a problem for me because of the gamepad I was using(gravis). Or if it's a problem with the epsxe.
But if I configure the analog stick then it deactivates all the other buttons.
What I did was configured the analog first. Then went back to the configuration screen and pressed "default", restoring all the original buttons. It still kept my configuration for the analog though.
After that I was able to change the button schemes to match my gamepad. It works like a regular playstation controller now.
Important to note that you still need to update drivers, since the windows xp drivers were a bit screwy in that it recognized my gamepad as a joystick -- prompting me to adjust x/y axis. The x/y turned out to be part of the directional pad, and part of the second analog stick(left side).


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