Settlement payments can be made on a website, where the funds are used to sue more defendants. None of the money is paid to artists.Ummm... wait, why is this still an issue? Oh, right, this is why.
The quick settlements have left largely unexamined some basic legal questions, such as the legality of the RIAA's investigative tactics, and the question of what proof should be required to hold a defendant liable for peer-to-peer copyright infringement.
Here's a not-so-radical idea. Consider the model of the initial release of Radiohead's In Rainbows, where customers could pay whatever price they deemed appropriate for the music. Let there be a site where fans can pay artists directly an amount they deem appropriate, that is, knowing that the musician's cut is around 60 cents per song download (do correct me if other sources differ). That way, fans can retro-actively contribute to the lives and livelihoods of musicians whose work they like after being affected by their music.
And even if you're one of those people who only listen to music on Pandora (or primarily/exclusively to artists who release under creative commons), you could contribute to your favorite artists, a bit like giving them a proportional thumbs up in the scaled, quantitative democracy of capitalism.
Scarcity of replicable goods/services/media is simply not a property of the Information Age. Scarcity of eyeballs is. The wise have already realized the emergent characteristics of this paradigm shift.
Current music: Peter Gabriel - Down to Earth