I was right there with you. My initial reaction to the recently announced Xbox 360 Wireless Speed Wheel was not really positive. It didn't look serious enough. It reminded me of a Wii accessory, and it was hard to imagine that it would work well with a serious racing game like Forza Motorsport.
Tonight I used the wheel to play Forza Motorsport 4. Believe it or not, this thing works. I wouldn't say that it gives you the precision that a dedicated steering wheel would, but it definitely works, and I had no issues at all in the test runs I put it through.
The Wireless Speed Wheel only needs to be held up in the air to steer, and it's very forgiving on what angle you hold it at while steering. I played through a course with figure-of-eight turns and the wheel performed flawlessly through each turn. Large analog triggers under each handle are set for gas and brake, and they feel even better than the triggers on the standard Xbox 360 controller for driving. The top of each handle lights up. I was told that developers are free to assign these lights to turn on as they wish.
The $60 asking price makes sense. You don't get analog pedals, but you also don't have to mess with power cords and connection cables. It's simple and it works well. I'm as surprised as you are!