How to Override Default Sorting Method in Layout XML

Instead of calling the setDefaultOrder method of product_list_toolbar block, use overrideDefaultOrder method instead.

See the following layout XML example:

<?xml version="1.0" encoding="UTF-8"?>
<layout version="0.1.0">
    <catalogsearch_result_index>
        <reference name="product_list_toolbar">
            <action method="overrideDefaultOrder"><order>relevance</order></action>
        </reference>
    </catalogsearch_result_index>
</layout>

This will set the default order by "Relevance" on product search pages.