Help with coding please - Arduino+AdaMotorshield+joystick

AF_Stepper motor1(225, 1);

Your steppers have 225 steps per revolution? That is a very strange number of steps per revolution.

    if (diststep < 0) { 
    } 
    if (diststep > 0) {

If it's not less than 0, and it can't possibly be 0, doesn't it have to be greater than 0? No reason to test that.

if(diststep < 0)
{
}
else
{
}

I'd try disconnecting the motors, and just Serial.print() the pot values, to see if they are reasonable.