Hi Rob,
Sorry you are having trouble with your controller - We tested it with some Xbox 360 controllers and a logitech Xbox controller clone, which all worked fine.. It could be that GameMaker doesn't support or recognise the controller you have.. Could you provide the model of it and I'll have a look?
As for keyboard controls, it is currently only set up so one player can use the pre-set keyboard controls. We can have a look in to improving this in a future release though, but as it stands there is no other way to configure this I'm afraid!
Thanks for your interest,
Chris