PID controller with camera.

[Ozuru]

It looks like you're using a system that centers itself in the pixel. Jared Russel has talked before about why this isn't a good idea, but the general complaint is that a camera has too high of a latency (even when plugged in via USB or equivalent) to be used in a PID loop. Instead of calculating the offset from the center, try and calculate values that might help you align. The distance, azimuth, and altitude are values that you might be most concerned about.