Demo level by Chris Plush of CG Masters featuring an easy to use mouselook script for FPS camera movements. The script includes a rotation limit so the camera stops when you're looking straight up and straight down. You can find a tutorial on the script at http://www.cgmasters.net/free-tutorials/fps-mouselook-script-plus-real-text/
Updated Aug 8, 2014: Fixed a fullscreen issue where if the cursor moves fast enough and goes out of the camera bounds it no longer registers mouse movement(which runs the script) so no longer controls the camera. I simply added an always sensor to always run the script.