This issue is similar to the issue below.
I have installed a new installation of CiviCRM 1.7,9821 using PHP 4.4.7 and MySQL 4.1.22. When creating a new individual contact, the primary location is by default set to HOME, however, all new contacts incorrectly set the billing location as primary, after which the primary location cannot be updated to any other location (HOME, work, other, main, etc.). This has the effect that when data is entered in the address field, any actions taken to save the record after updating any field results in the address being deleted from the contact record.
Because "Home" is the default location type - the Billing location should NOT be made Primary location for the new contact.
thank you in advance!