I just finished (less than 3 minutes ago) Greg Boyd's book of the same title as this blog post.
So much good stuff in this book, done with Boyd's typical thorough attention to biblical and philosophical detail, that any attempt to summarize would end with me reproducing the entire book. But if I were forced to summarize the book, I'd do so with this statement: "Our all-powerful and all-loving God chose to create a universe in which physical and spiritual beings had the freedom to choose for or against good. While God does seem to occasionally supernaturally override the laws of this universe he created, God's desire that his creation freely choose to love him means that beings will often choose evil, leaving creation to deal with the fall-out of that evil. While God may bring good out of evil, God is not the author of evil."
Just for kicks, here's a quote from chapter 7:
"One of the reasons why we like simplistic answers to difficult questions is that we don't like ambiguity. As Job insightfully saw, much of the abusive theology his friends were hurling at him was motivated by their own fear (Job 6:21). They hated the way Job's suffering called into question their God-in-box theology and they feared that what happened to Job might happen to them. Hence, despite all appearances they insisted that the universe was a fair place, that fortune and misfortune are God's just rewards and punishments, and that Job's suffering must be his own fault.
A central point of the book of Job is to denounce this theology. But this means that the universe is not a fair place. It means that we ultimately can't know why a righteous person like Job suffers. And it therefore means coming to terms with our fear of living in a sea of ambiguity."
People want simple answers because they're afraid of ambiguity. So they will say simple, dumb and hurtful things and hold onto those misguided beliefs. We learned this first-hand during the whole struggle to become parents. If we heard "God has a reason" one more time, we were going to punch the person who dared say it. While the failed attemps at pregnancy and the failed adoptions are almost distant memories compared the joy of being Dawson's mommy and daddy, a wholistic interpretation of scripture reveals that God was not the author, nor the one to blame, for those terrible events. But he is to be praised for bringing an incredible blessing out of those painful events. In choosing to create a world with open possibilities inhabited by free moral agents, God has allowed for the possibility of evil such as infertility while at the same time, bringing good out of even the worst circumstances.
In addition to Boyd's great answer (or attempt to answer to the best of the ability of a smart, but non-omniscient dude) to the question "why do bad things happen," Boyd also gives a great rebuttal to the Calvinistic "blueprint" view of the world and to the unfortunate view of Divine Election that comes from a misinterpretation of Romans 9. You can buy this book cheap on Amazon and it's worth the money just for the last two Calvinist-refuting chapters.