In my opinion, option 2 makes more sense since you can set the default individually for each printer.There's two different preference panes that can affect paper size. [change it from Letter, the American standard to A4, the European one]
1. System Preferences > Language & Text > Formats
Change Region to Israel (Hebrew).
That works for Pages, but not Mail or Safari. For those apps:
2. System Preferences > Print & Scan
Change Default paper size to A4.
This is VERY un-Apple like.
I would like to hear the opinion of the group on this situation -- which option do you think Mellel should adhere to?