Where is the setting to default the radio button to Subscribe and Email to the thread. The default is Do Not Subscribe. We've searched and can't seem to find the correct location.
There are no such settings, you need to modify the member_register template and change the instant subscription method by adding selected to below code and removing from default.
Code:
<option value="2" selected="selected"{$instant_email_subscribe_selected}> {$lang->instant_email_subscribe}</option>