FR ....... The front wheels steer, the rear wheels drive....QUOTE]
That is true of all layouts bar 4wd and FF.
I chose MR in GT4 because more of my favourite cars are MR than any other layout. I want instant steering response and chassis adjustability in a car, and in GT4 that usually means either a mid engined car or a Lotus Elan

The MRs are the ones that I find easiest to adapt to. This means I can spend more time thinking about my racing and less time trying to remember the car's idiosyncracies. Good examples for adjustability: Lotus Elise, Suzuki GSX-4, Renault Clio V6. Good examples for instant response: All named above, plus Esprits, Spirra, Stratos. Most these cars feel light and responsive, and that's what I like about MR (and the Elan, for racing) Bad examples: Jag XJ220, Tommy Kaira ZZ (the small one, not the ZZ-II) - both have too much understeer and the throttle has little influence on their cornering attitude; Lotus Europa (This won't earn me any rep points....) lots of fun in slow corners but way too loose in fast corners. Feels like RR in 3rd gear or higher corners.
Second would be RR which I find fun but a bit more demanding that the driver adjusts to it's demands. Good examples - Alpine A110 - I love this car. It's so much fun, and it's surprisingly fast. Also, excellent response to steering and throttle makes it supremely pointable; Ruf BTR - like A110 but with more understeer, much better engine, and less patience. Bad examples: Alpine A310 - too soft and has too much momentum oversteer; Ruf CTR (Yellowbird) - If you relax, it kills you. Also, it understeers. Lots.
FR (apart from the Elan) just tends to feel a bit too slow to react for my liking and doesn't allow me to attack the track in the way that I prefer to, but comes third. Good examples - plenty. One to suit every mood and style. Bad examples - hmm. I wasn't very impressed with the Triumph Spitfire.
4WD comes next because these cars either tend to understeer a lot or be unpredictable - like they are trying to fix some handling problem at the same time that I am trying to fix it. I haven't really learnt to put my faith in the drivetrain of a lot of these cars and that is part of my problem, but also in GT4 I find they are more impressive for their pace than for their involvement. In a real car that might feel great but on a computer it just feels slightly dull. Having said that, my good example has two things I hate in a car: understeer and an unadjustable attitude. It's the Audi quattro. I love this thing because it's just so precise and, well,
solid. Go too fast and understeer starts to build up, back off and the understeer fades. Despite the understeer it turns in very well, and the steering is always wonderfully precise. My lap times in this car are more consistent than in almost anything else. When I read reports about this car, these are the qualities that made it so popular. Precise steering, utterly composed and stable chassis, and great pace. The game version has it all (apart from the pace). Bad examples: The Suzuki Escudo (sp?). I never did quite get the hang of this car. For road cars, the Delta Integrale, only because it wasn't as special as I thought it would be.
FF is my least favourite in GT4, partly because it feels so badly modelled. It doesn't really remind me of my road FF experience at all, and that's partly because of the peculiar power
oversteer that the more powerful models exhibit. While I have experienced this in a proper car, it was a rally car, and it was on dirt, and the power induced oversteer was preceded by a hell of a lot of understeer. GT4 just feels.... different. It all feels wrong, especially when compared to GT Legends, in which the FF cars feel far more believable to me. - Bad examples: Alfa GTA, Ford Focus RS (Though, saying that, when you give the GTA 430bhp and leave the rest of the car standard, on then put it on N2s, it starts to feel a bit more familiar in FF hot hatch terms. Apart from the wheelspin in 4th.)
Good examples: Ford Focus ST170 on dirt. That felt OK.