As a slight extension: all should not contain a settings.php file, default should only contain a settings.php file. If /all contains a settings file (defining databases, docroots, etc) will just cause users confusion when they try to change their local site settings.
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.