I agree that the Dragon may be a bit overpowered, and will play with increasing the costs of launching missiles in the next version. That said, with a bit of practice, it is quite easy to dodge the AI's missiles as the Knight, though unfortunately, I didn't have the time to teach dodging to the Knight AI, so it keeps running straight into missiles. :-(
As for the recoil, I will try tweaking the angular drag in the future versions and hide some UI elements while spinning very vast to decrease the nausea factor, but I do want to keep the crazy spins in the game, because when you're hit, your ship spins...
(•_•)
( •_•)>⌐■-■
(⌐■_■)
...out of control.