Is there something i'm missing? the hat switch isn't recognized

Are you running one of the DOS versions? Then you can use the DOSBox keymapper to set the hat switch. There's a good video guide in this post (it's for X-Wing, but it will work for TIE Fighter too):

https://www.gog.com/forum/star_wars_xwing_and_tie_fighter_series/xwing_1994_tweak_guide_video_graphics_sound_music_speed_and_controls/post1

the 1995 Tie Fighters Collectors CD edition i'm playing, which I thought was only just on dos?

I tried rebinding the keys for the hat, dosbox sees them, but in game they don't work at all.

Try JoyToKey

http://joytokey.net/en/

Yes, it's DOS. But when you buy the game from GOG you also get the 1998 re-release which was on Windows 95, as well as the original DOS floppy disk verison from 1994.

Anyway, since you're using the 1995 version which is DOS, the video I linked to should show you how to set up the hat and get it working using the DOSBox keymapper. Is that what you tried already?

If you've tried that and it still doesn't work, then follow StyleWan's advice and check out JoyToKey (or Xpadder) which will let you map your joystick buttons to keyboard keys, so when you use your hat, the computer interprets that as a keypress on the keyboard. I've never tried using JoyToKey with DOSBox but it should work.

EDIT: Only now do I notice that your post title says TIE 95... sorry about that!

The same was happening with my logitech joystick: the mapper will happily take your inputs and assign them but nothing will happen in-game.
Changing the dosbox conf file to joystick type fcs (or something) was the first step towards fixing this, but it caused a whole slew of other joystick issues, for which the final step was to install a specific joystick DOS patch for the game which I found about by reading the other big threads on the forum.
After that it's been working amazingly well, including the hat switch.

I forgot about that. It's called TIECDJoy, I think?

Is this patch still around? :)

Yes. There are other posts about it here. Let me check....

Try this post:

http://www.gog.com/forum/star_wars_tie_fighter_special_edition/joystick_not_recognized_in_95_tie_fighter/post5