* What, on your opinion, is "setting?"
The backdrop, the world/universe, with the physics and history that go with it.
(Interface, as far as I'm concerned, has nothing to do with setting.)
* How important do you think setting is in a role-playing game, in comparison to plot and characters?
It's extremely important. A good setting may not be able to save an otherwise horrible game, but it can certainly turn a good game into an excellent one. Of course it depends on the game, how much focus you put on the various aspects, but generally I'd rank setting, characters and plot as equally important.
* What are the hallmarks of a successful setting, in your opinion?
It's hard to say. Anything can become successful with enough
brainwashing advertising. It's less about quality these days and more about people telling themselves they like something because they saw a poster in the subway telling them they should.
...I'd
like to say that it should be well crafted, make sense given the rules that govern it (unless it's actually not making sense on purpose), and preferably have something that sets it apart from the rest. Failing that, just obtain the rights to use a famous brand name and slap some pictures of tits on the package.
(No, I'm not bitter. Leave me alone.)
* What is your favourite cRPG setting, and why?
I can't just pick one.
I have a soft spot for the Algo solar system, from the origial Phantasy Star games, for the multiple planets and science-fantasy feel. Even if it's simplistic, the space travel aspect was fun, as was interacting with the various types of beings who inhabit the planets. Of course, part of what made it awesome was seeing how the world evolved through multiple entries in the series... which may be beyond our scope here.
I'm also quite fond of the "post-apocalyptic modern fantasy world full of demons, angels and mythological beings" setting, which the Megami Tensei series has used to great effect. (Generally more than Fallout's more realistic post-apocalyptic setting.)
The Wild Arms series had a theme with a planet in decline, much of it covered in deserts, with a kind of "fantasy old west" feel to it. Even though the series is quite generic otherwise, that world is something I keep looking back at and remembering as fun and different.
...generally, I tend to find jRPGs better at this than wRPGs. The one wRPG world that I really like is Planescape, mostly Sigil with its "melting pot of the planes" theme. That's an awesome setting.
(Actually, that's wrong, because I just remembered that I liked the pure sci-fi setting in the old gold box Buck Rogers games, too. It was fairly low-tech sci-fi, and a lot of fun.)
* In contrast what in your opinion is the most successful setting and why?
As long as we're still talking RPGs here, it's most likely the generic fantasy mish-mash, such as pretty much any
D&D license. You'll never have a problem finding a game with dungeons, dragons and wizards.