I actually prefer Settlers with 2 players now, over 3 or 4 players. What we do is each play with two colors, playing each color independently, condition is that whichever player controls the color with the fewest victory points as the game ends (when another color reaches 10 points) is the loser.

When I play with only one color, I find myself just 'watching the dice' the whole game, since there isn't that many decisions to occupy myself. And I find the game somewhat frustrating. By playing 2 colors, I have plenty of considerations to keep myself occupied. Also, I feel the victory conditions explained above add some extra depth than just having the high scoring color win.

You need to make extra decisions, like last night my wife delayed building the 10th point with one of her colors until she could get an extra knight card, thereby taking the largest army away from my trailing color, which put her trailing color one point ahead. She then reached her 10th point with the other color one turn ahead of me doing something else...

Placement of tiles, and which directions you build in become more interesting. Basically, I find that its more challenging to maximize the victory point total of your weaker color than to maximize the victory point total of your stronger color.