Hyper Ultra Astronautics [Official Site] is the latest game from FRACTiLE Games and promises lots of space action. It's a fast-paced competitive local multiplayer space arena shooter, and it claims to have a somewhat realistic flight model.
I tested it out briefly and it seems to work fine, but the problem I have with games like these are that I rarely have someone to play with locally. I do hope it adds online multiplayer as that would be pretty sweet.
The flight model is quite nice though, seeing the little thrusters fire when you turn in cool.
You can download a demo right here.