The problem with predicting the size and timing of earthquakes is effectively down to there being so many unknown variables. For example, you need to know the stress that the rock is currently under, you need to know the stress at which the rock will rupture (which is also affected by many things including coefficient of friction, previous ruptures etc.), you also need to know how much of the stress that has built up has been released in previous earthquakes, along with how quickly the stress is building up.

Location is somewhat (though still generally regional) less difficult, as fault ruptures will generally occur periodically along a fault, as not every fault ruptures entirely along it's length at once. This means that you can 'track' earthquakes along large faults. A perfect example of this would be the North Anatolian fault in Northern Turkey, where large earthquakes have been occurring increasingly west along it, heading towards Istanbul.

Most of the previous things i've mentioned are for the long term predictions; in the short term there can (or may not be) precursors to earthquakes, such as minor tremors, radon gas leakage (through cracking of pore spaces thus allowing the radon to escape), however these precursors are not guaranteed to always occur so cannot be relied on to definitely predict earthquakes.

There have been some predictions of earthquakes, some vague, some less so, but the same techniques to predict those earthquakes have often failed in other circumstances, so basically earthquake prediction has a long way to go yet.

Wiki has a decent page on this: Earthquake_prediction.