Description of problem:
can not set the default KDE
system ignores the settings in /etc/sysconfig/desktop DESKTOP="KDE"
It seems you are using gdm as login manager. The DESKTOP enviroment is just ignored in this case. It's expected behavior, please choose the desktop from select box after you click the user in this case.
We have run into this exact problem. We "fixed" it by using KDM instead of GDM by setting DISPLAYMANAGER="KDE" in /etc/sysconfig/desktop. KDM seems to respect the DESKTOP variable in /etc/sysconfig/desktop so it is able to default a user to either Gnome or KDE.