pat.heard

If you want to do it without editing the core files, you can hook into the post_submitbox_misc_actions action and add some jQuery that will fire onload:

function default_post_visibility(){
	global $post;

	if ( 'publish' == $post->post_status ) {
		$visibility = 'public';
		$visibility_trans = __('Public');
	} elseif ( !empty( $post->post_password ) ) {
		$visibility = 'password';
		$visibility_trans = __('Password protected');
	} elseif ( $post_type == 'post' && is_sticky( $post->ID ) ) {
		$visibility = 'public';
		$visibility_trans = __('Public, Sticky');
	} else {
		$post->post_password = '';
		$visibility = 'private';
		$visibility_trans = __('Private');
	} ?>

	<script type="text/javascript">
		(function($){
			try {
				$('#post-visibility-display').text('<?php echo $visibility_trans; ?>');
				$('#hidden-post-visibility').val('<?php echo $visibility; ?>');
				$('#visibility-radio-<?php echo $visibility; ?>').attr('checked', true);
			} catch(err){}
		}) (jQuery);
	</script>
	<?php
}
add_action( 'post_submitbox_misc_actions' , 'default_post_visibility' );