We did this type of control two years ago when we did swerve drive. It worked out reasonably well, but we had some small issues with the gyro drifting a bit every once in awhile.
Our students even did it with two people: one person controlling X/Y, and the other controlling the direction the robot was 'pointing'. If it wasn't for the trailer on the back of the robot, I think it would have been pretty cool... but the two drivers ended up making it look like the bot was fighting itself.
Code is on my website if anyone's interested:
http://www.virtualroadside.com/FRC