Excellent news, I'm glad its all starting to work- post some screenshots if you can! If its not being cheeky can you post the blend file? I wouldnt mind having a look at something that works.

As far as the control issues, you may want to play with the ships mass settings (in the actor panel) to make it harder for collisions to make it spin out of control. Another way might be to ghost the ship and link it to a primitive shape, as this may make the collision engine more predictable and less unstable.

At the minute I am looking at servo movement as this may give the feeling of 'drift' in the controls