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I feel I have to disagree with much in this post Matt... I'll break it down into smaller chunks.

Originally Posted by MazdaMatt

The oversteer/understeer characteristics of a street vehicle are determined by the weight distribution and wheel alignment. 99% of new cars are front engine because all that weight at the front causes the front to break away first so the car ploughs when the driver panics and slams the breaks and cranks the wheel. It is easier to survive a front-on collision, that is why they do this.

first off, while you are partially correct that in a street vehicle (indeed even race vehicles to a large extent) over and understeer are determined by weight distro and wheel alignment, you are overlooking an equally important (perhaps even more important) aspect of the equation: suspension setup - in particular the relative stiffness of the sway bars front to back.

Second, 99% of new cars are front engine/FWD (just call them FF and be done... FR would be front engine/rwd, MR is mid/rwd etc.) not because of steering characteristics, but because it is easier to design (and cheaper to build) them that way, and also allows the manufacturer to maximize a given vehicle's utility so it can appeal to as many potential buyers as possible. let's face it: MR configurations have very low useable interior volume when compared to FR's (hence why that layout is generally reserved for high-performance vehicles), and FR's are inferior to FF's although not by as large a margin.

I also have to take issue to your characterization of understeer as being preferable to oversteer. there is a saying you might be familiar with:

oversteer makes passengers go 'holy $h!T!!!' while understeer makes drivers go 'holy $h!T!!!'.

A small caveat here... understeer *is* preferable to snap oversteer, but a smooth and gentle oversteer is *far* preferable to any understeer, regardless of the drivetrain layout of the vehicle. a properly setup suspension will always tend towards oversteer. as an example, all of my scariest moments in cars have been during understeer events, where my car threatened to slam into a wall or launch itself into the air towards the outside of a curve (many ramps around here have large curves with no railing on the outside radius). every time I have experienced oversteer it was such a non-event that my heart didn't even bother to beat faster.

I went for a few ride-alongs in a friends MR2 at autocross and he was always battling oversteer becaues the rear end has more sideways momentum in a turn making it more likely to break traction.

there are a number of variables there to consider... what year is the MR2? (the 1991 and 1992 SW20 models were prone to snap oversteer because of their suspension setup, which was nerfed by toyota for the 1993 and later models). also, oversteer should be seen by an autocrosser as something to be used and not fought - when the back breaks loose, drift it. that or your friend had something setup in a non-optimal way - it could have been as simple as using the wrong tires for that surface that day. certainly there are other avenues of investigation that I am not mentioning. if the MR2 in question suffered from understeer, your friend would have had a hard time being competitive - and might not have been able to stay on the course.

As for the original topic, you could make one hell of a sleek frontal shape, top, bottom and sides if there were no ducts there for cooling or intake. A RR car definately has more aero friendly potential. I can't think of a high-speed supercar with the engine up front.

RR cars with engines any larger than the original VW beetle and of course the 'thing' have severe handling problems - a serious tendency towards snap understeer in particular.