a: For taller people the problem is saddle setback. Shallower seat tube angles help overcome this problem but do necessarily eliminate it. Reach is not usually a problem
b: For shorter people the problem is reach to the handlebars and standover height. Smaller frames tend to have steeper seat angles to try to reduce the stretch to the handlebars. However this means that KOPS isn't achieved unless the saddle is set further back, thereby negating the steeper seat angle, and still leaving exactly the same problem with reach.
I prefer drops to straight bars as these tend to hurt my wrists and arms over long and /or rough journeys, but I seem to have similar problems to Mark with drops - no doubt as I'm a similar height. On one bike I have a 4.5cm stem (I don't think any are made shorter than that) and on another a 7cm 40 degree rise stem, which because of the rise is short, both with compact bars. I don't suffer from back pains or any other pains of significance, but I find that I am always slightly stretched especially when I set out - maybe it's good for the physique.

Bicycles have been around for over 100 years but still the problems of fit haven't been solved! Is it because frame design is now stuck around the use of 700 wheels and proportionate smaller frames cannot be made? Is the problem caused by drop handlebar design? With older bars the hands were behind the steerer, but with modern bars the hands are in front. Do you need a stem at all to attached the bars? Anyway I think with current bicycle design shorter people will always have a problem of bike fit, and will not match the stance of Colin in the picture - but maybe I'm wrong?
