Setup advice from Shane Pitkin of Velocity Motorsports:
The first thing I wanted to ask was whether you used a wheel & pedals for your control hardware, and you mentioned that you use a T2. When I used my buddy's T2 I found that I could brake much deeper into the corners, which is why I mention that on my ICR2 page where I have my best times posted. I really do think you can shave a second or two off your time by using that kind of hardware.
As far as coming up with a good setup, it's really nothing too mysterious, but I can tell you what I do ...
First rule of thumb: always change one thing at a time. Second rule of thumb: unless you just want to see what happens at the other "extreme," make small adjustments at a time. Third: keep your sway bars at neutral positions when you're first setting up the car; that gives you a good setup which can be improved with sway bar adjustments, but leaves open the option of being able to stiffen or soften sway bars during a race as needed -- as fuel load lightens, tires heat up & wear, etc. -- and still have a decent-handling car. I vary brake bias depending on the type of circuit, and pretty much keep it there throughout. (I like to mess with it a bit when everything else is in order, but not much.)
Setting up gearing I usually work out 6th first, basing my top speed on the longest straight of the circuit; you want to redline at the end of it, of course, but not too far from the end, because as you get faster during the race you'll naturally redline sooner. The other gears can be made taller or shorter as needed to give you acceleration where you want it, or to allow for higher top speed -- I'm sure you know all about that.
Tire pressures and camber are primarily to get even temps across the tires. The basic idea is that if a tire's too hot or cold at one of the edges as compared to the other edge and the center, adjust camber; if the center temp differs from that of the edges, adjust pressure. (Also, overinflation can cool a tire that's running hot, and vice-versa, but you generally want your temps even across each tire.)
Something else I've discovered over the course of setting up for all these different types of circuits: don't increase the wheel lock to compensate for a tight car. Look at shocks & sway bar adjustments instead. I use the minimum wheel lock I can get away with, which also tends to cut down on the tire wear. As far as shocks, I look at how the tires are wearing and how responsive I want the car to feel in cornering; I tend to keep the rear shocks pretty stiff. I like a pretty loose car; the loose condition can, of course, be accommodated with sway bar adjustments. I have a feeling it's the rear shock stiffness that gives my setups that certain "feel" more than anything else.
A lot of it's just a matter of trial and error. You can figure in theory what the car will do under particular circumstances, but from there, it's just trial and error with minor adjustments -- one by one, and little by little -- until you find the setup that's comfortable, responsive, and fast.
I've been working on a setup for Indy for NASCAR 2 lately, actually, and I think I've finally got it. That one took me a few hours altogether, because it takes so long to get around Indy and you need to make lengthy runs if you want to set the car up right. For instance, tire temps on the RF may be such that during the first two to four laps you figure you need to adjust the pressure there, but after a half-dozen laps you find the temps even out. The car can change dramatically handling-wise within the first few laps. I've also found that sway bar adjustments during a race, at some circuits more than others, are absolute necessities to keep the car at about the same level of handling (loose without the rear end coming around on you, for instance, especially at the NASCAR-converted ovals). One other thing: an adjustment in one place can affect other settings you've already "established" -- but then you've probably figured that out by now ...
Anyway, I've been working solidly on this setup, being able to turn a 174.xxx once in a while, and finally, after some final weight jacking adjustments, I hit 175. That was my goal, and it made my day! The car now feels fantastic, and it was the shock adjustments that allowed me to take turns 2 and 4 as I wanted to. As I mentioned, I think it's primarily the shocks that give a setup that distinctive "feel" ...
Well, hope that helps some. As I said, it's mostly trial and error. Sometimes I don't enjoy taking the time to make little adjustments, run several laps, and do it again and again for an hour or two, but in the end it's the only way I've found of coming up with a satisfying setup!
Also check out some thoughts from other sim racers on ICR2 setups and my overview of vehicle dynamics.