In the mod settings, check the "enable gamepad" option. Keep in mind that this will ignore your mouse input!
If you're using the enhanced edition, you need to play around with this option:
Try both XInput and DirectInput, and see which one works for you!
Make sure that you have either the SH2 Enhanced Edition installed (highly recommended) or the Silent Hill 2 v1.0 English No-CD Patch. Those are the executables that work with the mod.
Try disabling the collision of the camera (F1 -> Aim Settings -> Use Camera Collision). In my experience, sometimes the collision system doesn't like the positioning of the camera and it causes a crash.
I'm looking into this at the moment!