Disk brake has never worked properly from new, pads replaced - still rubbish!

I suggest first checking that everything is assembled correctly. Make sure the rotor is on the wheel the right way round (it should have arrows in the centre). Download the instructions from Shimano's website and check that everything is in the right place and done up tight (but not too tight!) Or tell us what model you have and ideally post a picture.

Look down at the pads and make sure that they clear the rotor on both sides and that they're parallel to the rotor. Squeeze the lever and make sure they squeeze fairly evenly and with no obvious stiction. If the pads aren't parallelreset the capiler - these directions look fairly useful to me and there's a video (that I haven't watched). Basically, loosen the mounting bolts, squeeze the brake lever, tighten the bolts.

Can you describe "not working properly"? Is it braking power, rotor rub, noise, lever throw,etc? Also, what brake model? Moz's idea for caliper alignment works well on most Avid brakes but it relies on a floating mount system that your setup ay not have.

@David The presence of any oil on the pads or rotor is a bad sign (and also likely explains why the brakes no longer squeal as much) - what's the lever-resistance like? Can you pull the lever all the way into the bar? If they've never worked properly I'd suspect they need to be bled, or you could have a very small leak-you don't see any fluid then around the drums that press the pads into the rotor. You can service this yourself but it's finicky and requires a few specialized tools. It's usually the same price to have your bike shop bleed the brake as buying the manufacturers bleed kit, so I don't bother doing them myself.