Yes there is a happy medium that's better than than a gamepad alone or the kb/mouse combo. It's an ambidextrous flight stick for your left hand and mouse for your right hand.
- analog movement, good for FPS and driving games and others (obviously, flight games)
- don't have to worry about accidentally taking your hand off wasd and messing up your control/movement while you fumble to find your way back to the right position
- you feel more "in the game" when you move your arm forward and your character goes forward
- "rumble pad" available if you get a stick that supports it
- you can even use the hat tip for for games that are better off with a digital controller, such as Super Mario World on an SNES emulator
- not all games support joystick such as Bioshock and Doom 3 (maybe there are mods that can change that). You can fake it by remapping your keyboard keys to the joystick
- sometimes the default joystick settings for a game are stupid and you have to figure out how to change them correctly (for example, an FPS might by default use the X-axis to turn left and right instead of strafing left and right. You want the mouse for turning left and right
- sometimes a game has too many keys to be mapped to the flightstick. My suggestion is to buy a flightstick that has as many buttons as possible accessible without taking your hand off the stick (if you can find one that has a button or two for each of your four fingers plus several on the top for your thumb, that would be great). And also buy a mouse that has lots of buttons - at least 5. If you STILL need more buttons without taking your hand off the stick of the mouse, consider remapping buttons to your numpad that are accessible by right thumb that controls the mouse
I had a really old flightstick from 2001:
that I was using on a Win 7 64-bit system until this spring when I moved and had to throw it away to make room. I plan to get a newer and better one when I get the chance.
Examples of FPS games I've played with flightstick/mouse combo: F.E.A.R., Unreal Tournament, Star Trek Voyager Elite Force, Serious Sam, Killing Floor. Driving games are obviously much better with analog control - I've played games from the Need for Speed Series using the stick to drive and the mouse to navigate menus.