Wow its been over a year and i installed a new version of the cart TODAY and we still have the SAME ISSUE?
WHY??
My hack doesn't seem to work now either so really we are going backwards?
thanks for any help as to how to resolve this issue yet again.

VirtueMart 2.6.6
**UPDATE - 2014-06-02
Here is what i had to do UNTIL there is a more Permanent FIX.
Open the file: plugins/vmpayment/authorizenet/authorizenet.php
after the line
foreach ($this->methods as $this->_currentMethod) {
add
$selected = $this->_currentMethod->virtuemart_paymentmethod_id;
This will set selected to the ID of Auth.net payment method and make the radio be selected.