To help with the joystick sensitivity, you could add some code to create a "dead-zone".
Essentially, the robot would think the joystick is in the neutral position unless it is moved in a direction a certain amount.
Code:
'---------- Joystick Dead Zone -------------------------------------------------------------------------------
'-------------------------------------------------------------------------------------------------------------
if ((p1_y > 137) OR (p1_y < 117)) then end_p1_y_dead_zone_adj
p1_y = 127
end_p1_y_dead_zone_adj:
if ((p1_x > 137) OR (p1_x < 117)) then end_p1_x_dead_zone_adj
p1_x = 127
end_p1_x_dead_zone_adj:
Try adding that before the part that says 1 Joystick Drive. It may help a bit.