
I think you're about half-right. Yeah, there definately seems to be a negative attitude when other students (and even some of the teachers) think about the students of Slytherin...
However, you must keep in mind that Draco Malfoy was pale and rude before he ever boarded the Hogwarts Express, much less spent months living in a dungeon.
I always assumed that the originators of the Houses chose where those groups would live... therefore, Gryffindor chose the tower, and Slytherin himself chose the dungeon. I don't think this is actually confirmed in any of the books, except to say that the four founders were the ones in charge at the beginning (as in, I don't think there was an actual Headmaster at the time) and when they conceived the idea to have four houses, they would have had to come up with where the students would live.
One must also remember that a Gryffindor hasn't always been Headmaster. I would imagine that in Phinneus's (I don't think I spelled that right... Sirius's grandfather or great-grandfather or whatever) time, the Slytherins were the Headmaster's pets, and the Gryffindors (or Ravenclaws, or Hufflepuffs) were looked down on.
On the subject of the stereotypical Slytherin, though, I have to wonder... Will there ever be a Slytherin in the books who is good, who fights against evil, and who tries to actually befriend members of the other houses? In a book series that seems to be so steeped in the idea of choices, it seems as though there would be someone who definately stands out as someone who would be in a bad situation but make good choices... *shrug* Maybe not... but I'd like to see it.