I've used 3 different DualShock 2 controllers with my Xtokki and all 3 worked perfectly. Every now and then I experience the jumping issue you mentioned, but it only happens if I accidentally touch one of the sticks, giving one a quick wiggle has solved the issue every single time without any frustration. All of the DS2's I've used were bought brand new, in the box.
I've never actually used my DS2/Xtokki to play a game using the analog sticks, but my guess is it would be a fucking nightmare. If you plan on using the sticks then DO NOT buy an Xtokki. I consider the Xbox360 controller to be superior for most any game that uses the sticks anyway, so even if the analog sticks worked perfectly with an Xtokki, I'd still switch back to the 360 controller for those games.
There is no doubt in my mind that if you're using a 360 controller to play MK9 then you're performing with a handicap. Especially if you're playing a character like Kenshi or Freddy. Good luck pressing down, back, and forward accurately on one solid piece of rock hard plastic.