An apparatus for use in a wellbore is provided, which in one embodiment includes a drilling motor and a steering unit placed about a shaft between a lower section of a stator in the motor and a drill bit. The steering unit includes a substantially non-rotating member and a force application member on the non-rotating member configured to radially extend the force application member from the non-rotating member. In another embodiment, the steering unit may include, rotating member configured to rotate a drill bit, a steering member configured to orient the drill bit along a selected direction, a first steering device configured to orient the steering member in the wellbore, and a second steering device configured to maintain orientation of the steering member when drilling the wellbore.