Hi R900. I totally agree with the comment on the rear brake. After lots of mucking about I managed to get acceptable performance from it so haven't changed it. What I did:
The problem is with cable routing not the brakes. The brakes are excellent on my friend's touring bike, so no reason why they shouldn't work properly here.
Things to fix:
Basically anything that moves when you pull the brake is eating up braking power. Thus it needs to be stopped.
1) Too much cable outer - cut the outers down as far as possible while getting a smooth run, particularly the one which wraps round the stoker seat tube. This is where 90% of the problem occurs - mine is now practically touching the top tube all the way round and doesn't flex while giving a reasonable straight cable path. Also ensure all the cable ends are perfectly at 90 degrees - use either a dremel or grinding wheel to do this.
2) The cable hanger coming off the stoker seat collar is a really crappy solution and IMO responsible for 80% of the problems. Reason is that it twists under tension, doesn't allow enough space for the cable to enter it without nasty curves and can be adjusted so that the cable exit is not in line with the brakes. A better part here would fix things. Let me know if you find one. To make the best of a bad job I first bent the hanger slightly so that the cable enters straighter. The fixing is now off centre but that doesn't matter as you can tune this out by adjusting the brake springs slightly. I then set the adjustment screw so that the cable exits in a straight line to the brakes.
Steps 1 and 2 are somewhat iterative. Also don't go overboard on bending the hanger as it will break if you bend it too much.
3) Set up the brakes as per Sheldon Brown's instructions on his web page. IIRC key is to set the pad as far away from the canti as possible by changing the order of the conical washers and spacer ring. This increases mechanical advantage of the canti / straddle wire.
4) Adjust brake springs to maximum tension to keep cable taut and ensure both brakes touch at the same time.
5) Ride in the rain - the road grit will bed in the pads and rims much more than many thousands of miles of sunny rides.
6) Final possible improvements:
a) Nokon cable at the rear
b) Kool stop salmon coloured pads
c) better hanger
I did also consider the drill out option, but didn't want to as I think the drop is too big for a standard caliper, so perhaps a drop-down mount which fits the frame tube is the answer. Too much hassle though. A disc is possible, but again not without its own hassles and costs.
Hope that helps.