I have also an answer, that it more Easy. In the game I am creating now, i used a game object. I did so the game object was to be a prebab or what the name is. And so, i added a camera, a characher controller. And now It can be constrolled as you want to.

Try using transform.forward rather than TransformDirection(Vector3.forward). You might want to consider putting it directly in the SimpleMove or creating another variable other than "forward" (I get nervous when using variable names that are already in use on other Components)

Also, your character will move at different speeds depending on your framerate. Try multiplying your move by Time.deltaTime in order to keep the movement framerate-independent.

EDIT

var speed: float= 6.0;
var rotateSpeed: float = 3.0;
var cControl: CharacterController;

function Awake (){
    cControl = GetComponent(CharacterController);
}

function Update () 
{

    var direction: Vector3 = Vector3 (0, Input.GetAxis ("Horizontal") * rotateSpeed* Time.deltaTime, 0);
    var movementSpeed: float = Input.GetAxis ("Vertical")*speed*Time.deltaTime;

    transform.Rotate(direction);
    cControl.SimpleMove(transform.forward*movementSpeed);

}

Try the above. Let me know if you still have the same problem... there's one more thing I can think of trying...