Default is what is used to create a new profile on the machine. All users is for every user, new and old. The default profile is used mostly for deployemt configurations and such. All users is used for machine application installs and things of that sort, and when you mant to make something stay on everyones profile. If users of the machine don't have admin rights, then they can't change the all users settings. Where as Default user copies everything into the profile of the user that is being created, and allow users to fully control it.
hope that explains a little...