VATS is broken. Shots consistently fire off-center from certain guns. This is very easy to demonstrate: start a new game, forceav guns to 100, give yourself a brush gun (121148), a .357 revolver (8f216), their respective ammos (140a9e, 13e43e), and go to Easy Pete. Back out to the nearby road, then open fire with the brush gun. You can very clearly see the bullet strikes on the window behind him, and they will consistently strike above his head. Backing further away will not solve the problem; the pattern remains high. Setting fvatsrangespreadmax to a high number (say, 10000) will give you 95% accuracy, and you can thereby verify that this pattern of high shots is not just a statistical anomaly. But repeat the experiment with the .357 revolver and notice that it does not suffer the same problem!
Some less thorough testing leads me to believe that the problem is on a gun-by-gun basis, and not an issue with (for instance) rifles but not pistols. The 9mm pistol does not seem to have the problem; the .44 mag revolver does; the .357 lever action rifle does...more, I haven't tested.
Either way, the problem is quite real, very obnoxious, not present in Fallout 3, and desperately in need of a patch. VATS is almost useless with certain guns until this is patched.