The reason you are seeing 1000 is most likely because the DS has a 10 bit
A/D. Therefore, the data range is 0 to 1024 (2^10). Note: this is just a guess because the spec sheet in the control system does not indicate how large the A/D is.
With most potentiometers (even joysticks) you will notice they don't use the entire range. This is due to many reasons and you should plan accordingly in your software.
As for the lag... I'm pretty stumped. You'll have to provide more info for us to help you on that one.