The /default folder can actually define a specific site, unlike all, which applies to many sites.
Earlier I objected to default having a specific site. It should be the prototype for specific sites. Thus all installs should be treated as multisite with only one site present. This means that when you download a new release the default setting file that comes with it does not overlay one of your sites. So perhaps there should be another name for default, like distributed or original.
Hmm. Let us say I have a multi-site configured. The /sites directory would look like All/ Original/ Foo/ Bar/ Now let's say someone requests a site called "bar". Which folder is used? In the current system, drupal searches through the folders to find the most specific one. If none are found, default is used. The name makes a lot of sense in this context. I think "original" makes less sense in this context. -M