Just updated Blender to latest version using cheleb PPA (Ubuntu 12.04 32bit) and noticed that my mouse-look test-game gone wild with rotation. I tried to use very small applyRotation() values but controlled object spins like crazy :spin: .
Here is test blend with both static and dynamic object which are rotated using same script. On my Blender dynamic cube rotates hundreds of degrees per second, wile static - slowly as it should:
263_test.blend.zip (59.8 KB)
Is it same for you? Is it a Blender bug or some kind subtle change?