Definitely not true. I graduated from FSU COM in 2009. The sites for years 3 and 4 are as follows: Orlando, FL; Tallahassee, FL; Ft. Pierce, FL; Sarasota, FL; Pensacola, FL; Daytona Beach, FL; and Thomasville, GA. Through the history of FSU, it's pretty standard that 1) the Tallahassee site fills up quickly, as priority is given to people with a legitimate reason for a particular campus, and thus all the married people and people with kids stay in Tallahassee 2) the Orlando campus is by far the most popular every year and fills first, the Sarasota campus is a distant, but solid, second most popular and fills after that. 3) the Pensacola campus is the least popular site in Florida, as it is further away from home for pretty much everyone. This one consistently fills second to last, leaving only... 4) Thomasville, GA is the least popular because a) it is in a very small, very rural town that has NO social life for 20-somethings. b) you're there with only 3 or 4 other people, so if these people aren't your friends, you're lonely all the time.
Thus, I would say about 1/3 of the people are really happy with where they go, 15% of people are really upset with where they end up, and the rest are somwhere in between. And it's done completely by lottery (again, unless you have a legit reason for staying in a town... and no, Orlando being your home town does not qualify).