I just got TrackIR5 myself. In fact, I just got the whole shibang (pedals, TM Warthog and TrackIR5). Trying them out all at once is quite a sensory mix. At one point while muddled, I was trying to change the attitude of the aircraft with my head movements. Very silly I know. ;)
Anyway, I find that when I run the TrackIR5 software, on the left side is some tweaking options. On some of the dropdown menus there are some presets, and one of them is "smooth". I set that, and it seems to help substantially. The use of the F12 key to center the tracking on your current head position/alignment is also great. You can even do it in game. I think I still need to tweak it probably, as the top of my monitor is a little bit above my head level, so when I look down, and really peer at the left console or somesuch, it loses tracking. Works excellently apart from that though, and feels very natural. :) But that's the whole point. *cough*