How to tell if you're hit? Maybe looking at the screen would be an idea.

The claim about the vibration supposedly interfering with the motion ability has been disputed by eDimensional, a company that makes third party controllers/ accessories. They recently announced a deal with Immersion (the people that Sony allegedly took the idea of "dual shock" from, resulting in a lawsuit they lost and are appealing the decision) to use what they call "advanced vibro-tactile, spinning-mass gaming technologies" (translation: vibration and motion sensing together) in an upcoming controller for PC and PS2 use. Going by this it seems Sony isn't quite telling the whole story.