Comment on the setting and character of "The Fall of the House of Usher."How does setting act as a character?

Excellent observation, as it identifies how the settings
of Poe's stories reflect the characters of their protagonists. Whether it is the
catacombs in "The Cask of Amontillado" that reflect Montresor's disturbed and twisted
character of the House of Usher, whose dilapidation reflects the own mental instability
of its owner, Roderick Usher, Poe always uses setting to great effect in his gothic,
spine-chilling tales of horror. Consider what we are told about the House of
Usher:

Its
principal feature seemed to be that of an excessive antiquity. the discoloration of ages
had been great. Minute fungi overspread the whole exterior, hanging in a fine tangled
web-work from the eaves. Yet all this was apart from any extraordinary dilapidation. No
portion of the masonry had fallen; and there appeared to be a wild inconsistency between
its still perfect adaptation of parts, and the crumbling condition of the individual
stones. In this there was much that reminded me of the specious totality of old woodwork
which has rotted for long years in some neglected vault, with no disturbance from the
breath of the external
air.

Note the overall
emphasis on rottenness and decay. The setting of course is a symbol that could be said
to represent the madness and mental disturbance at the heart of the owner of the house.
At first glance it appears to be of sound quality, but closer examination reveals issues
that could indicate serious structural problems. Remember, the narrator has journeyed
here, not out of choice, but because Roderick Usher, his childhood friend, has written
to him to come and be with him as he is suffering from a "nervous agitation" and a
"mental disorder". How mentally disturbed he is will only be revealed at the end of the
story... Your question correctly identifies that in a sense the house is a symbol of the
diseased and rotting character who owns it.