I have just set up a local version in order to install a mod and set up a separate profile to run the modded version. This is a utility mod I will only want to use on odd occasions.
I expected that the default profile, which still had "Use Latest Version", would still select the latest vanilla release version (it doesn't have the snapshots option selected) but it also selected the modded version.
I have worked round it by selecting release 1.6.1 explicitly but would rather have the default profile pick up the latest release version so that I don't miss any updates.
Update: Now that Minecraft v1.6.2 has been released, the default profile is picking up the new un-modded version as expected. I'll update again when the mod gets updated for 1.6.2 and I make a new local version.