rampancy: I think Settlers is grossly unfair. Maybe my luck is rotten or maybe I just plain suck (maybe too much of the latter and less of the former)? But in my experience, it's almost impossible for the player who has the last opportunity to pick his settlement starting location to have any decent chance of winning.
Actually, I feel the worst position is the one before the last. The really good hexes are already taken and unlike the last player, you do not have the chance to at least grab two of the remaining that make good sense together. The third one is picking up scraps in both of his turns.
rampancy: In some cases you can't even play offensively against stronger players (i.e. blocking their roads or settlement locations) because you're stuck in the middle of nowhere on the board [...] IMHO, for a game like Settlers, every player should have an equal chance of winning, and from my (admittedly limited) personal experience, you'd might as well call the game at the very beginning.
This is definitely true, and the reason I don't play SoC anymore. In the end, it's the dice that is the problem. From my observations (and I've played this game a lot), if you don't get any or just very few cards in the first two rounds of dice rolls (something you can't influence in any way), you might as well give up, as you're never ever going to catch up to the other players. Most games I've seen have one or two players who lose the chance to win relatively early in the game, and for the rest of it are just sitting there, rolling the dice and praying it would already end. That's not good design.
I've also witnessed a game where a 2 was rolled considerably more times than a 5, which effectively determined the winner -- sitting on what theoretically is the most worthless position in the game. The element of randomness really hurts Settlers of Catan, in my opinion.
Do check out Puerto Rico; there is almost no randomness in that game, which is one of the reasons I like it.