@rjotter Generally folks here don't like to help those who are using a pre-made SD image as the best source of help tends to the person who setup that image because who knows what they did with all the configs and setup.
BUT... you may need to look into using the xboxdrv?
https://github.com/RetroPie/RetroPie-Setup/wiki/Universal-Controller-Calibration-&-Mapping-Using-xboxdrv
I experimented with it at one point but never got it to solve my input issues. Turns out there were simpler issues at hand.
There is also this: http://blog.petrockblock.com/forums/search/?bbp_search=steam