Ok so I decided to have a fiddle with the wheel settings yesterday. I was already pretty happy with what I had but thought I would attempt to apply some grey matter to the subject to make it a little more sim-ish. Take note of your existing settings in case you want to revert to them.
Key settings:
Speed sensitive steering - turn this off (left side). It's an aid designed for keyboard/gamepad players
Steering sensitivity - turn this to 100% (all the way right).
Steering linearity - where you place this setting depends on how you set your wheel rotation. Center it at 50% if you're following this guide.
Force feedback, in game: max, Fanatec profile: 70% (may differ on your wheel)
Wheel rotation - 900 degrees.
This provides the most 'natural' steering input without it being manipulated by the game, however handling big slides, bumpy surfaces, and 3 point turns may require extended wheel work and practice. It's a case of being set up for fun vs being set up to be as fast as possible. I only had small issues recovering from pit maneuvers on dirt roads, which as you might expect is somewhat realistic.
My previous more arcade setup mimicked my TDU1 wheel settings. As you adjust one setting, you need to slightly tweak the others to retain balance.
Speed sensitive steering: up slightly to ~20%
Steering sensitivity: down slightly to ~75%
Steering linearity: down slightly to ~40%
In game force feedback: down slightly to ~80%
Wheel rotation: between 540 to 680 degrees. Go lower for more snappy instant (arcade) steering (useful in cities) or higher for more precise and relaxed cruising B road steering. Or just set it and forget it at 600 degrees and call it a day. All of my YouTube footage up until now has been with these settings.
Also spend some time playing with the pedal sensitivity curves. You generally want to leave the accelerator as a normal linear curve, but you may want to play with the brake curve for better modulation you want to brake as late and quick as possible for corners but not come to a big stop either.
Playing with the clutch settings may help reduce how often you get the grinding sound. It seems that you have get the clutch input to maximum before you push the gear stick into neutral.
Finally, here's some footage from physics developer Sebastian: