Hey guys,
Sorry to hear you are having troubles with UE4 + DK2. Let try to fix them.
As to the stuttering (or judder). If you use STAT FPS, what is the frame rate? Make sure Rift monitor is in 75 Hz mode AND FPS doesn’t drop below 75 FPS with VSync on. And yeah, make sure the VSync is on (use HMD STATS commands). To turn VSync on in stereo mode use HMD VSYNC ON console cmd.
If your video card is unable to keep 75 FPS rendering try to lower the ScreenPercentage (HMD SP 100 cmd will set it to 100%, default is 135% for DK2).
I can give any ETAs on when 0.4 integration will be included into UE4 branch. We (Oculus) are planning to release it ASAP as a separate integration (patch + changed src files + GitHUB branch).