iCal defaults all new events to "all day"?

How do you stop iCal from defaulting all new events to "all day"?

In past versions of iCal it would automatically set a new event to a time that was close to when you make it and it defaulted to like two hours - now, if you make an event in the evening it can carry into the next day- plus there's AM / PM issues... Is there a preference or other way of controling this annoying new default feature?