I have to say the more I ride it the more I am warming up to the 3 setting for solo. Over the road I dont notice it at all, the ride is smooth. When I go over a dip or sizable depression in the road I notice more "launch" when it is on 1 and when on 3 I dont have to prepare myself so much for countering it, if you will.
The word "launch" is a perfect way to describe it. There is a road I regularly travel on, and it is very uncomfortable for me on setting 1 for this very reason. I had to constantly brace myself for each upcoming bump or dip. Going to setting 3 alleviated this without making the ride feel stiff, and I've found that in general the bike handles better.
Why is it that no one uses 2?
To be honest I never tried 2. I went from 1 right to 3. The reason being is that the first time I messed with the setting was a day last year that I took my brother out riding. With another full size man as a passenger I figured I'd better go at least two steps. After riding with him that afternoon I decided that position 3 was not quite enough for the two of us, and maybe 4 would be even better. So with 3 being a little weak for the two of us there is no way that 2 would work. So maybe 2 would be just fine for me for solo riding, but 3 is also just fine, or even perfect, and is a better setting than 2 for taking a passenger...at least for me anyway.