When you want to assign grade boundaries to letter grades in a course there is a check box that says "Override site defaults".
For the life of me I cannot locate where these site defaults are set up.
Thanks in anticipation.
Richard
I believe you are looking for the Letters section in Site Administration?
That would be in Site Administration -> Grades -> Letters. Looks like you can edit the grade letters and boundaries from here as a site default.
In Moodle 2.0.1+ this link opens the gradebook for the front page course (which is not accessible anywhere else) and not a default Admin settings page as it did in 1.9. However updating the Letters here will create the server default letter grades for all courses.