Here's what worked for me, hopefully it will help others...

I looked everywhere (docs, forums, source) and I only found two ways of reconfiguring the controls for FCE Ultra: plugging an USB gamepad and running it with the "-inputcfg gamepad1" option, or modifying the source code. I'm using the latest FCE 0.98.10.

I found a file where the Unix gamepad defaults are set:
I tried to change the values to the Hotrod defaults (i.e. movement by keypad, left ctrl and alt, etc), and the compiler accepted the values I gave to it (it complains and stops making the bin when I use the wrong codes). However, in spite of the recompilation, the keys remained the same when I ran the emu. I looked around, and found a couple of old config files in /home/mythtv/.fceulta, so I renamed them. And as I suspected, one was recreated from scratch (in other words it was using the old config).

Now it works, but I have a small conflict using the Hotrod... the "1" key, used for "1P start" in the joystick, also selects the "save state1" in the emu. Minor, but annoying.
Anyway... this is the best I could get out of it... Hopefully I'll soon have setup my KnoppMyth box enough to make a Tier 2 post...

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Don't panic!