I am putting together some ideas for my home built cab and wonderd if anyone had tried using the U360 sticks as analog sticks
Yes, works
ala a control pad
I hate gamepads, so if that's what you mean, no.

for driving games.
Yes, works.
Then map two of the two player buttons for the gear shift.
No, but should work. BYW, why player 2's?
I reaslise the best option would be the spinner with a wheel attached
Only for 360 degree wheel games like super sprint, offroad, and pole position. For 270 degree like spy hunter, the best would be 270 degree wheels, such normal PC wheels.
but wondered if this would work.
Would you actually be able to use the analog movement of the sticks as the steering controls or would it only be in digital mode?
If you tell the u360 to send analog signal, and map in mame as such, it will work fine.