Some people seem to have forgotten that the reason MSE is so good is because Microsoft have an entire department that explores those DrWatson errors people send them. Some of the time the reports include virus authors' early attempts which are accidentally sent and then used to create virus definitions.

If MSE was installed by default, the data MS would have to improve it would increase by a substantial amount. Also, MSE is generally rated the best AV in pretty much every independant review I've seen.

"Malware authors. You don't think they're going to ignore this development, do you? If most budget-conscious home users stick with Microsoft's built-in offering, then surely the first thing the bad guys will do is make sure their latest creation can slip past Microsoft's scanner."

While misguided, this point raises a problem. By having a single 'default' AV installed, it might mean the attack surface is made simpler as malware writers need only target a single scanner. With MS' demonstrated speed in addressing issues however, I doubt this is a great threat.