Important to note with elementFormDefault is that it applies to locally defined elements, typically named elements inside a complexType block, as opposed to global elements defined on the top-level of the schema. With elementFormDefault="qualified" you can address local elements in the schema from within the xml document using the schema's target namespace as the document's default namespace.
In practice, use elementFormDefault="qualified" to be able to declare elements in nested blocks, otherwise you'll have to declare all elements on the top level and refer to them in the schema in nested elements using the ref attribute, resulting in a much less compact schema.
This bit in the XML Schema Primer talks about it: http://www.w3.org/TR/xmlschema-0/#NS