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isn't it enabled by default? I know that disabling Guest is one of the first things I do to a new Mac/PC/Linux machine.

No, it's disabled by default - at least in Snow Leopard.

The key question then is what happens if you had enabled it in Leopard and then you install Snow Leopard as an in-place upgrade.

It looks like Apple meant to have the setting revert, so that guest logins had to be reenabled. Instead, you let your friend login to the (still-enabled) guest account and then...

No, guest login is disabled by default.

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