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Well... I hate that threaded vs flat option all together so I did something a little differently. Hopefully this helps some of you.
My site is new so it was easier for me then it will be for all you webmasters that have a ton of users already. First I went into each users account and chose flat as their prefered option. Then I went into the admin options and followed the directions above:
Go to System Admin\Preferences\General Settings.
About 2/3 of the way down it says 'Default Comment Display Mode'. Set that to Flat then all your registered users should all get the same flat view
Then so that none of my users have the default option to choose from, I opened edituser.php and removed the following:
$umode_select = new XoopsFormSelect(_US_CDISPLAYMODE, 'umode', $xoopsUser->getVar('umode'));
$umode_select->addOptionArray(array('nest'=>_NESTED, 'flat'=>_FLAT, 'thread'=>_THREADED));
$uorder_select = new XoopsFormSelect(_US_CSORTORDER, 'uorder', $xoopsUser->getVar('uorder'));
$uorder_select->addOptionArray(array(XOOPS_COMMENT_OLD1ST => _OLDESTFIRST, XOOPS_COMMENT_NEW1ST => _NEWESTFIRST));
save edituser.php upload to zoops root folder.
BUT BE VERY CAREFUL DOING THIS HACK!! If you do not make sure all your users have flat chosen (double/triple check!!) then you will NEVER be able to fix it, without putting the code back in. I personally am going to save it just in case I am wrong. But all seems to be working so far. The only other thing I want to point out is that I am choosing to leave the flat/threaded link option listed at the bottom of each thread. Just in case my users like it better that way for some odd reason. But I bet if you want to get rid of that, it wouldn't be to hard to figure out.
GOOD LUCK!!!