Nothing short of PvE vs PvP gets everyone riled up like the flight model!
 
Here's some succinct answers to help put / remove my many "umms" and "ahhs" from the Forum Feedback section of Wing Man's Hangar.
 
1) The physics simulation is Newtonian
 
2) There is no drag.
 
3) The IFCS (Intelligent Flight Control system) generally handles taking the pilot's inputs (desired pitch, yaw, roll and speed) and translates them into actions for the thrusters and ship to take to adjust the ship's velocity vector in the direction the pilot wishes to go. This system will do it within human acceptable tolerances (it will not change your velocity vector in such a way as it could cause harm to the pilot)
 
4) Slowing down is caused by the pilot telling his IFCS that he wants to be traveling at a lower speed. The IFCS then communicates with the ships thrusters to adjust the ship's velocity accordingly.
 
5) If you turn you engines and IFCS off you will continue to coast at the same velocity.
 
6) Fuel is consumed by using your thrusters or main engines. If you coast you will not be using fuel, but making velocity vector changes will consume fuel.  
 
7) More advanced IFCS systems will allow you to turn of parts of its overrides or allow it to interpret you inputs differently - for instance you could tell it you want to go into an "orientation" not "vectoring" mode where it will take your joystick inputs as solely ship orientation inputs and not try to correct your ship's velocity vector to be aligned in the direction your ship is pointing (the famous Battlestar Galactica maneuver).
 
8) We will limit the top speed of ships you can fly for technical issues (physics engines have problems when the numbers get too big) and fun - figuring out an intercept course for an opponent traveling at 0.2 speed of light (which is our fictional max for practical spaceflight in 2943) maybe be challenging if you're a mathematician or physicist but not what I call fun gameplay.  
 
9) This top speed will be less than the top speed of weapons.
 
10) Top speed will probably be dependent on ship class but we haven't balanced this so it may be a matter of all ships having the same cap but the smaller faster ones can reach that limit much quicker (and therefore put some distance between them and their pursuers even if they go to max). This needs to be tuned so that people with the right kind of ships can run from a fight. The idea is that once you get enough separation between you and a hostile you can make the jump to autopilot / warp speed (using the Star Trek term), which is how you cover big distances in-system (essentially at that 0.2 lightspeed (c) number I mentioned). Just at these speeds you're not maneuvering - you're just accelerating and decelerating in a straight line. Think of it as human (player) controlled flight for the lower combat / docking speeds and then when wanting to warp to a destination (say a planet or a jump point) you hand control over to your ship's flight computer which handles plotting the trajectory and accelerating you to the 0.2 c speed that a RSI quantum drive can achieve.
 
11) I do know what G-Force is :-) I use the term as a measure of acceleration on the human body as its good short hand for people to grasp the concept of forces acting on a body when accelerating and decelerating. You may be interested to know that "..The accelerations that are not produced by gravity are termed proper accelerations, and it is only these that are measured in g-force units. They cause stresses and strains on objects. Because of these strains, large g-forces may be destructive..." Occasionally people think it is only to do with gravity and earth bound flight but that's actually incorrect - its just that's the case we're most familiar with. And yes these forces come into play when accelerating and decelerating in space and until we develop some system to increase our tolerances to the effects of this acceleration they will be the limiting factor on how aggressively we could change the velocity vector of a ship, irregardless of whether we are in the atmosphere or not. Its also interesting to note that we're built to withstand much greater accelerations in certain directions - modern day pilots can withstand 9 G but much less negative Gs. Its why you see pilots rolling and pulling back on the stick when attempting aggressive maneuvers rather than pushing forward or yawing with a rudder. The same will be true in space. We're going to factor in G-Force in the simulation, and allow pilots to push the boundaries (or switch the IFCS safety off) in search for a little advantage, but beware if you back (or red) out in a dogfight you may come to floating in space next to the smoking wreck of your ship!  
 
-Chris

Skyflash's summary of what I'm trying to achieve accurately sums up what will underpin the space dogfighting simulation.
 
And just to re-iterate - the flight model / movement you have seen (and will always see) is 100% Newtonian. All movement of spaceships in gameplay is achieved by applying impulses to the rigid body of the spaceship - either to affect the linear velocity or the angular velocity. There is no cheating / fudging where we introduce fake drag or anything.  
 
As its almost impossible for a pilot to individually control every thruster's attitude and burn to achieve his desired maneuver there is a system which we call the Intelligent Flight Control System (IFCS) that interprets the pilot's input, maps it to a desired result then handles the calculations and control of the thrusters to achieve the result.
 
I doubt we will ever allow a pilot to try and fly manually and control every thruster individually, but I wont rule it out. But what will definitely happen is that there will be various levels of control / over-ride - you will on a more advanced system be able to specify that your flight inputs are just to control your orientation and not for your velocity vector. There will be other ways to affect how the IFCS behaves - turning off G limiting on certain maneuvers (as the standard system will always operate inside an envelope of safety but a more adventurous pilot may want to push the limits at the risk of blacking out or death to gain that extra edge in a dogfight)
 
The idea is that the basic / beginner / simple IFCS will be set up to make flying around pretty simple and intuitive. It will take the pilot's inputs and map them to behavior similar to Wing Commander / Privateer - you control the orientation of your ship and set a desired velocity, the IFCS tries to achieve a velocity vector matching your forward vector multiplied by desired speed - which was actually how Wing Commander / Privateer actually worked - it was a basic Newtonian under it all despite popular belief - its why you would "slide" when you hit afterburners and tried to turn - normally there was enough excess thrust for maneuvering to adjust the velocity fairly instantaneously but as the speed got higher it would take a little while to correct to the desired velocity vector.
 
As you upgrade your IFCS / customize it you will be able to drill down and change its behavior.
 
The commercials use a combination of this (we have the ability to set a spline curve that the IFCS tries to fly a spaceship along) and occasionally the cinematic artist will hand key positions for "dramatic" effect (for instance the Hornet firing the retro thrusters wouldn't tilt up if you were just arresting velocity - although the IFCS could achieve that if you asked it to - but it looks cool and screams "Top Gun" )
 
I think some of people's confusion (including Codey's) as to whether Star Citizen currently uses correct Newtonian physics stems from the fact that the visual thrust that is displayed from the various thrusters is NOT indicative of the actual thrust being applied - Currently the magnitude of the exhaust flame is showing the magnitude of the component of the delta of velocity between the desired velocity vector and the current velocity vector in the thruster's direction. The direction and flame are really just indicating which component of the velocity vector is being adjusted - so if your sliding sideways due to an aggressive maneuver you'll see the thruster jets firing in the opposite direction as the ship tries to adjust the velocity vector to be aligned with the ships forward vector. I've posted about this before but originally I had the thrusters portraying their thrust and orientation correctly but as there is no drag or force to fight against in space what happened was that the thrusters would oscillate around and flicker off and on, which looked more like a visual glitch or a bug in the system so I switched the visuals (but not the actual physical modeling) to the above system. I intend to take another pass at this and try and have a visual representation that while not 100% accurate (as I believe that will always look silly as the the thruster burns are usually one or two frames maximum given the low velocities the dogfight operates at) will be a lot closer. So you'll see the thruster starting a turn and the opposite thruster deploying to arrest the turn. I think this will help with perception as well as keep the visual elements I want (thrusters gimbaling to apply thrust, cool looking burns).
 
Codey's ideas and enthusiasm are appreciated and he has some good ideas.
 
However I'm not looking for a reason to make the dogfighting "more" correct - Codey's suggestion is really another "in-fiction" way of justifying low velocity space dogfighting that handles similarly to atmospheric dogfighting.
 
The "in-fiction" reason in Star Citizen for the low velocities during dogfighting is due to a human pilots ability sustain large G-forces. If you need rapid and dramatic velocity vector changes (note this is different than orientation changes) unless we have developed a way to sustain / absorb much higher forces than we can presently the top speeds will be naturally limited as the faster you go the smaller vector change you can enact without applying a potentially lethal amount of force on the pilot. Even today most jet fighter airframes can take a lot more G-Force than the pilot. This is probably why in the future most air combat (and probably space combat) will be done with drones - but where's the fun it that?
 
So in the Star Citizen universe you can go very fast (much faster than during a dogfight) but the faster you go the less maneuvering you can do. During dogfighting the IFCS limits your top velocity for safety reasons (if you start going too fast it will fire retro thrusters to slow you down). I am toying with the idea of a pilot being able to turn this "safety" off to a certain extent (at large magnitudes the physics system breaks down as there isn't enough precision in a 32 bit float). At faster speeds it may either limit how much you can turn (not very helpful if you have a missile on your tail!) or would cause you to back out / die if you told the IFCS to adjust your velocity vector quicker than your body could take.  
 
Due to this travel between distant locations will probably entail a period of linear acceleration and then an equal amount of deceleration as you approach your destination. But during this you wont really be able to make dramatic or quick course corrections which also folds nicely into our "in-fiction" explanation for "auto pilot" or "warp" in system -
 
Because you will be traveling at velocities several orders of magnitude than while dogfighting you can only every "warp" in a straight line and the ship's systems will pull you out of warp when close to other ships / navigation hazards (like asteroids, planets etc.) as it would be impossible to affect any significant velocity vector change in a short period (the kind that would be needed to avoid a collision) without killing the pilot / crew.  
 
I do think that a local gravity field / effect (Codey's proposal) would be a great way to explain how ships can achieve 0.2c in system without a huge fuel burn - We haven't really detailed out the physics behind "auto-pilot" / "warp" mode in system (which is what the RSI Quantum drive was all about) so maybe we "borrow" some of Codey's system for that as I think its a pretty cool idea. It would be especially handy if due to the "physics" of the gravity field it somehow negated the forces being applied to the pilot / crew so we would have a good in-fiction explanation why we can accelerate to 0.2c in a relatively short order of time but need to keep dogfighting speeds really low due to the inability for the human body to sustain forces above a certain level.