Is Destiny a Worthy Plot Device in Fantasy?

Fellow writers and readers, I have recently been wrestling with the idea of fate or destiny as a plot element in fantasy literature. My books, so far, have not relied on the concept, but I know that it has been done numerous times throughout the genre.

Is it a worthwhile concept? Is it done to death? Is its former interest now lost on the current audience of readers? Is it boring?

David Eddings wrote Pawn of Prophecy as the first volume in an extensive series called the Belgariad. As you can tell from the title, prophecy, or destiny plays a large part in the story. Eddings proposes a model of prophecy as being not something set in stone, but like a stone flying through the air. There are two prophecies at work, one light and one dark. If the heroes play their parts correctly, their stone will strike the dark one in mid air, sending it back on course.

This is admittedly, a really cool concept!

Then you have Star Wars! In this series, talk of destiny is largely used to manipulate Luke Skywalker into choosing one path or another. Yoda and Ben tell him he is "destined" to confront Vader, but then according to the dark side, he is "destined" to replace Vader at the emperor's side... Then of course the climax of the films comes when Luke stands viciously over his wounded father, who is an inch from death after a fierce lightsaber duel. The emperor goads him to strike Vader down. Instead, Luke shows his true power, an inner power, by throwing his weapon into a massive electrified pit (common appliance in Star Wars spacecraft) and refusing to fight.

What makes Destiny work as a concept? Crypticness? Plot twists? Multiple interpretations of it? Perhaps the hero must deviate from the supposed destiny in order to be truly heroic, or the destiny might prove to be born of ignorance and assumptions, the true quest being to uncover the erroneous nature of the so-called prophecy?

One way I would approach it:

Prophecy becomes more possible and more clear the closer one is to being defeated. Imagine good versus evil as a chess game. When one side is almost lost, the outcome becomes obvious to predict, because there are a very limited number of legal moves. A prophet then is someone who watches closely, and anticipates the final moves, not one who uses magic to literally see the future.

I would also consider having a character completely lie and manipulate using the idea of prophecy to dupe the other characters.

If you are a writer, how would you approach prophecy and destiny in your work? As a reader how do you respond to such tales? Do you seek them out? Avoid them?

Discuss!