Jeff
Are you calling drupal_render in the theme function or the form builder?
You need to call it in the theme function.
See theme_user_admin_account and user_admin_account, the form is built and returned in user_admin_account (as a flat form) and returned as an array, which is then rendered in theme_user_admin_account as a table.

Lee
On Fri, 2010-09-03 at 00:49 -0400, Jeff Greenberg wrote:

So there seems to be two problems with the drupal_rendered form field. One is that in looking at the page source, the option value in each of these select fields that matches the #default_value are not marked as selected.

The other problem is that the data is not passed back on any of these fields, and the page source shows each of them having a class of form_field like the non drupal_render fields, but id="" and name=""