Legacy of Kain Defiance

Could somebody please tell me how I can get this game to recognize my xbox 360 controller? I've done what the manual says but of course that doesn't work.

It seems that you'll have to map the keyboard keys to the controller manually. Try Xpadder (it allows you to set keyboard keys as buttons on a joypad).
www.xpadder.com/

I have joy2key, that wouldn't work with this game?

Yes. Programs like Xpadder and Joy2Key should work with any game (or program) because they aren't dependant on compatibility with individual pieces of software; they take user input from the joypad and make pass it to the PC s if the buttons/analogue sticks on the joypad were keys on the keyboard/mouse movements.
One of the downsides is that you'll have to remember which keys are mapped to which buttons (games will not change in-game prompts and text to match joypad keys, as games that officially support the 360's controller tend to do). For example: if you map the "J" key to the right trigger on a joypad, the game will prompt you to carry out whatever J's function is by pressing J and not right trigger. Also, PC games sometimes have more keys that need to be used than there are actual buttons on a joypad.