First off, I recommend that you have your game patched. When the game came out it was glitched to oblivion and patches have came out that fix many of these problems. I'll still include the bugs that were there before the patch for completeness sake and for those of you who don't have your game patched (although I see no reason why you wouldn't except maybe if you don't have internet, but then you wouldn't be able to read this guide I suppose either.)
I should also note that even with all the patches this game is going to freeze like it's going out of stile, so you're going to want to save a lot. The game does auto save a ton, but sometimes this is a bad thing, like if you screw up bad in the order in which you do the quests in this game and who you piss off and when you piss them off. For this reason you're going to want to have a lot of your own hard saves. Save before lock picking, save before hacking, save before doing an exploitation, save right before taking sides in a quest... you get the overall picture.
Now for settings. I prefer to have the x-axis and y-axis at max speeds because I also play a lot of shooters, but just go with the speed you like. If you've played through the game several times I suggest raising the difficulty, and if you're new to the game put it at an easier setting. If you played Fallout 3 a ton I still suggest you put it at normal until you played through the game a few times because enemies like Death Claws that are actually hard at level 30 for the average player and Cazadors that do a Hell's amount in poison damage, the game is much harder(While maybe that's not saying much, but still...) As far as the auto save function is concerned, turning it off helps combat some bugs, but you'd better remember to save a lot because even just going back one cave can be aggravating (especially if you just took on a legendary Death Claw and it freezes right after you exit the cave!) You should keep True Iron Sights On. Trust me, the Fallout 3 cross hairs or what ever they're called suck, even if you don't play First Person Shooters. Everything else is just personal preference.