So, since I've bought Forza 4 I've been obsessed (sort of like what happened with Forza 3). Now that I'm deep in the game I'm starting to really define how I play the game and am interested in how the GB is playing as well. So, how do you play Forza 4? I'll give my answer as an example below (you don't have to put in as much as I did or you can put in more or different things. It's all up to you).
Suggested Line: Braking Only
Damage, Fuel, and Tire Wear: Simulation
Stability Control: Off
Traction Control: Off
Cockpit unless I'm driving a 'race' race car (the cars where the windshield is tiny). Occasionally bumper or Chase-Far (in aforementioned 'race' race cars). I originally went to cockpit view to increase the difficulty but now I've gotten so used to it it is hard for me to hit my cornering lines unless I'm in that view.
Type of Car
I usually pick the car that is the fastest. BUT, I tend to use more AWD cars for the traction and grip on corners versus RWD and FWD. I usually swap in an AWD train into all of the cars that I use on a daily basis. I tend to pick European cars because the American cars have a heavy back-end that whip to wide around corners.
I try to get all of my braking in before turning my car at all. This allows me to full throttle around turns while still holding traction. I usually follow a line where I bank wide before the turn, brake to appropriate speed, turn in toward the corner (apex) of the turn (usually the middle of the semi-circle of the turn), accelerate to full-throttle, and pull out wide and speed into the straight-away (though it doesn't always work the way I want it to). Occasionally I'll drift but usually I'm in control and have grip.
I usually pass on turns by taking the inside edge.
Peripheral Used for Driving
I use the Xbox 360 controller. It works great. I really don't want to find a spot in my house for a driving wheel.