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Kyros said:
"They can use buttons if they want."

of course true, but you don't have as many buttons for the different actions. Also having two analog sticks is a huge advantage (as can be seen by many sucky PSP ports of PS2 games)

This is pretty much what the standard controller is optimized for.

How about this, 1 analog for the movement, second analog is always camera control and in games that use it aim. Why not use the pointer as a replacement for the camera angles? There's your second analog, it's already been used for aiming so that's a non-issue. Z & C replace L 1 & 2 B replaces R1 then you have the Dpad(which is pretty easy to use to map out as seen fit) Hold down + and use pointer for another function. The motion sensing and button combos can replace a decent amount of buttons.