Has anyone used this radio system? How is it's performance? I'm thinking about putting it in a losi micro desert truck. Will it work well for that application? Please tell me what you think.

Excellent for the money. If you buy it from hobby partz you can get free USA shipping and they are really fast.
I have 3 for my kids. No problems at all

http://www.hobbypartz.com/79p-gt2-blue.html

It is a good and very cheap 2.4Ghz controller.

If you also want to "upgrade" it so that it will have a control on EPA (end-point-adjustment), you can follow the procedure stated here:

EPA hack on a HK-GT2 or FS-GT2

I have two GT2 sets and the same problem with each of them. After attaching the esc (40A Turnigy Plush) and programming it normally to recognize throttle hi and lo points, the motor responds correctly to the throttle but the steering servo no longer responds to the steering wheel on the tx. Oddly, the steering trim adjustment does still work even though the servo does not move when the steering wheel is turned.

As an experiment, I switched the throttle and steering positions on the receiver, after which the throttle responds to turning the steering wheel and the steering servo responds to the tx throttle control! Weird.

Surely I'm doing something wrong, but I fail to see what it is. Probably something simple, one of those "duh" things.

Some help here would be appreciated.