Basically Halo CE offers 3 options: 30fps, vsync and no vsync.

First one is not very smooth. Second one causes irritating mouse lag. Third one fries your computer (jk, but seriously though, I don't think it's necessary for my fan and card to go nuts just to get the game run over 1000+ fps).

What do you people prefer? And would it be possible to make the engine cap the fps like in Source games?

This is exactly what VSYNC does, you're just over-complicating things.

Let's say your monitor refresh rate is 60hrz, then v-sync will cap the game to run at 60fps.
If the monitor is 120hrz, then it will cap at 120fps.

If your monitor refresh rate is 60hrz, and your PC can push ~240fps onto your monitor you are wasting power with frames that cant refresh fast enough to catch up. This also causes screen tearing.

V-sync can solve that for ye.

I almost always use 30fps because you get some strange visual artefacts on the other settings - Halo was pretty much designed to run at 30fps, and fair enough thats half the frame rate my monitor is capable of but I barely notice it. I can understand the logic for wanting higher rates though.

I have to use no-vsync or else I'll get input lag.

There must be a way around input lag, because I play with Vsync on and experience no mouse lag/acceleration at all.

I somewhat solved my 'problem'. I googled around and found out about program called Dxtory. It offers fps limiter for games. Fraps can do the same but only when recording. So now I get smooth gameplay and precise mouse movement without putting unnecessary load on GPU.