After spending hours and hours in Project Cars trying to set up my Steam Controller to steer with the gyro controls, I have finally come to a usable configuration. The problem (which I have now mostly solved) is that even if you set the deadzone to zero, there is still a deadzone. Here is the thing that was driving me crazy until I figured it out: The size of the deadzone on the horizontal axis is also influenced by the position of the vertical axis, the steering sensitivity, and the vehicle's current speed. Consequently, using the anti-deadzone feature on the Steam Controller becomes very complicated. Here is my solution:

1. Set the gyro to "Joystick move"
2. In the gyro settings, set it to output the horizontal axis only
3. In gyro advanced settings, change the anti-deadzone to eight clicks from the left
(I also like to set the Dead Zone Outer nearly all the way to the right; this just gives me a larger range of motion and does not have to do with the deadzone.)
4. Start Project Cars, and make sure your steering deadzone is set to 0. Set the steering sensitivity to 50.

You may notice that if your car is stopped, you have a small "negative" deadzone -- that is, your wheel will jump from the left to the right side of the center, without ever being centered. This is because the Steam Controller's anti-deadzone setting is overcompensating, and has actually removed the center of the range of motion. However, once you get up to about 100km/h this will disappear and your steering will be completely smooth. If you really dislike the negative deadzone at low speeds, add a small deadzone in the in-game settings -- this will result in a deadzone when driving at speed. I prefer the negative deadzone at slow speeds since I am almost always turning the wheel at these speeds so I don't notice it. If you want to increase your steering sensitivity, decrease the anti-deadzone and vice versa.

There is also another way to fix this issue, which is slightly worse in my opinion, because it restricts you to a smaller range of motion (about 45 degrees as opposed to nearly 180 degrees). Project Cars does not have a deadzone for mouse steering, so if you set your Steam Controller gyro to output "Mouse Region," you will have totally smooth steering. The problem is that you can't edit the Outer Deadzone in the Steam Controller settings if the gyro is set to Mouse Region, so you will be restricted to a very small range of motion. This makes the steering too sensitive in my opinion.

I hope this makes life easier for those of you who like using the Steam Controller's gyro to play racing games.