They were changed following the "Glorious Revolution" of 1688.

James II had converted to Catholicism prior to his accession (and it appears that Charles II had done so on his death bed) and it had not made him popular with his subjects.

When he fled, he had legitimate female Protestant heirs - Mary and Anne who reigned in their turn (Mary was a Queen in her own right and not merely the Consort of William IV). Neither produced living heirs so with the death of Anne the only other child of James II was his son (the Old Pretender) by his second wife, Mary of Modena who had been raised in exile as a Catholic and therefore exlcuded by the Act of Settlement.

To find Protestant heirs they had to work the line back to the sister of Charles I who had married Frederick the Elector Palatine and that led to the Hanovarians and George I succeeded Anne. He could not speak English and brought his mistresses with him having imprisoned his legitimate wife Sophia Dorothea for adultery (case of kettle calling the pan!)

There were many, irrespective of religion, that preferred a Stuart to a Hanovarian so religion was secondary for supporters of the Jacobite cause.

The Act of Settlement is still in force even though the need for it may well be considered redundant in our modern world and though an attempt was made in the House of Lords by Michael Forsyth, former Secretary of State for Scotland for it to be abolished, it did not get much support.

So any member of the Royal Family who marries a Catholic still looses their place in the Line of Succession - this happened to Prince Michael of Kent for example, but his low position in that line in effect made no appreciable difference. The Duchess of Kent's conversion on the other hand does not affect her husband or their children as she was not Catholic when they were married and the children are still Anglican.

This act is one of the main reasons for so much marriage with Germans by the Royal Family in the past as Germany had the highest proportion of Protestant royalty.

Hope this helps give a little more background to those interested.